Chinese telecommunications company ZTE has stopped major business operations, it has revealed, as a consequence on the US ban on selling components to the maker. The company mentioned the change in a document published today, stating that “major operating activities…have ceased” without additional details on what, exactly, that means.
The business decision follows last month’s legal issue impacting ZTE’s ability to purchase components from US companies. The ban was implemented after ZTE was discovered to have violated a 2017 settlement regarding the evasion of US sanctions against North Korea and Iran.
Later that month, Taiwan’s government ordered local companies to halt their business with ZTE prior to receiving approval. That’s not a wholesale ban on doing business with the company, but rather a way to ensure “they are doing legal business,” according to Taiwan’s Bureau of Foreign Trade.
As a result, MediaTek suspended business with ZTE, cutting off the maker’s access to chips. That, joined with the existing ban on doing business with companies like Intel and Qualcomm, has threatened ZTE’s future. Earlier today, ZTE published a regulatory document that states, among other things, that it has stopped major operations. The document doesn’t reveal which operations were stopped, however, nor the extent of the impact this will have on the company.
SOURCE: Wall Street Journal