ZTE Suspends Smartphone Sales in China After US Tech Export Ban

ZTE has been forced to suspend its smartphone sales in China and suspended sales of its shares. The US administration recently cut off its supply of key components and technology from US firms after it was found to have violated the country’s export restrictions by shipping products to Iran and North Korea. The restrictions may also lead to the company having to suspend sales in the US as well, while it attempts to have the supply ban reversed.

MediaTek has received permission from Taiwan authorities to continue supplying ZTE. Though the country isn’t covered by US export laws, companies were required to obtain a permit from the Taiwain Bureau of Foreign Trade before continuing to supply ZTE, now classed as a “controlled export target”. Other Taiwan-based technology firms are believed to also be going through the process to enable them to supply ZTE.

ZTE has released several smartphones already this year, including last month’s Nubia V18.

Meanwhile, the decision by the US is said to be causing chaos for ZTE. Anonymous employees have confirmed to various publications that they are attending work as normal, but that staff are limited to training activities only, as they are currently unable to produce anything. Analysts have gone on record to say that even if the firm is able to find a new main supplier outside the US, it will struggle to remain competitive in the market.

So far, ZTE hasn’t responded to any requests for comment.

This ban is but a part of ongoing trade-related tensions between the US and China. (US-China TV Tariff Could Cost Americans $711 Million Over Next Year)

Analyst Comment

See the editorial in this issue for our comments on this. (BR)