HONG KONG—ZTE’s main business operations have ceased due to a ban imposed by the U.S. government, but China’s second biggest telecom equipment maker is trying to have the ban modified or reversed, it said on May 9.
ZTE was hit by a ban last month from Washington, forbidding U.S. firms from supplying it with tech parts and software after it was found to have violated U.S. export restrictions by illegally shipping goods to Iran.
“As a result of the Denial Order, the major operating activities of the company have ceased,” ZTE said in the exchange filings late on May 9.
The U.S. action, first reported by Reuters, could be devastating to ZTE.
As one of the world’s largest telecom equipment makers alongside Huawei, Ericsson, and Nokia, ZTE relies on U.S. companies such as Qualcomm and Intel for up to a third of its tech components.
Analysts have said it will be hard for ZTE to stay competitive even if it could find non-American suppliers.
Taiwanese semiconductor company Mediatek said last week it had received a permit from the Taiwanese government to continue to supply ZTE.
ZTE said it was actively communicating with the U.S. government “in order to facilitate the modification or reversal of the Denial Order by the U.S. government and forge a positive outcome in the development of matters.”
The ban that threatens to cut off ZTE’s supply chain came amid heightened trade tensions between the United States and China. The Chinese regime raised the issue of ZTE last week with a visiting U.S. trade delegation.
ZTE said this past weekend that it had submitted a request to the U.S. Commerce Department for the suspension of the ban.
ZTE appears to have suspended its online stores on its own website as well as on Alibaba Group’s e-commerce platform Taobao over the past few days, which display a “page being updated” message with no products to order.
The Chinese firm did not respond to calls and messages from Reuters seeking comment.
