U.S. export ban on ZTE; UK advises against use of firm's equipment

U.S. companies banned from selling components to ZTE		
		
	Brian Heater

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   	7 hours

ZTE has relied heavily on the Dolby Atmos brand as a selling point of its smartphones, boasting that the devices' Dolby-branded speakers are among the best available.

ZTE didn't respond to calls seeking comment that were made after business hours in China. The majority of the ZTE smartphones in the USA are sold by the carriers.

The North American headquarters of ZTE is in Richardson.

The Commerce Department expressly said its action against ZTE is "is unrelated to any ongoing trade-related actions". Chinese technology companies, a new rule is here that severely limits the USA trade prospects of a Chinese tech titan.

But Commerce said Monday that ZTE paid full bonuses to several of those involved, then lied about it. As a result of the proclamation, American companies like Qualcomm and Dolby will no longer be able to export critical parts for ZTE's smartphones, which will have a bigger impact on ZTE's ability to sell smartphones in the United States market moving forward. ZTE isn't the only company hurt by this either as Acacia Communications, which made 30% of its revenue from ZTE in 2017, will also be hit hard.

On Monday US officials triggered a ban that would, among other things, prevent ZTE from buying US components.




Effective immediately, ZTE will no longer be able to use any USA -created hardware or software in its devices.

ZTE "provided information back to us basically admitting that they had made these false statements", the official said, adding: "We can't trust what they are telling us is truthful, and in global commerce, truth is pretty important". As part of the ensuing settlement, ZTE promised to fire four senior employees and discipline 35 others by either reducing their bonuses or reprimanding them. "This egregious behavior can not be ignored", US Secretary of Commerce Wilbur Ross said.

The current ban will be in effect for the next seven years, and will undoubtedly cripple the company.

But the bureau found the reasons behind the failure to comply are "red herrings to ... concerns that the company has repeatedly made false statements to the USA government - as the company has now repeatedly admitted".

The US action against ZTE is likely to further exacerbate current tensions between Washington and Beijing over trade.

Qualcomm also is awaiting approval from China's top economic regulator for its proposed $43 billion acquisition of Dutch automotive chip maker NXP Semiconductors. That order is recounted in an addendum to today's announcement by Commerce, which describes how the company broke the promise it gave in the agreement a year ago. Its review timetable expires this week.

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