Chinese Multinational Agglomerate, ZTE was hit by a ban from Washington, forbidding U.S firms from supplying it with components and technology allegations of violating against U.S export restrictions by illegally shipping goods to Iran.
The U.S ban which threatens to cut ZTE supply chain came amidst the heightened tensions over a possible China-U.S Trade War. The Chinese government too had raised the issue of the ban while visiting U.S trade delegation.
In its exchange filings on Wednesday, ZTE said,
“As a result of the Denial Order, the major operating activities of the company have ceased. As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject in compliance with laws and regulations.”
The U.S. action which was first reported earlier in March seems devastating for ZTE as China’s second-biggest telecom equipment maker relies heavily on U.S companies such as Qualcomm and Intel for up to a third of its components.
Analysts have said that it will be hard for ZTE to stay competitive in the market even if finds non-American suppliers. ZTE has also submitted a request for bank lift to the U.S Commerce Department.
Meanwhile, MediaTek which is a Taiwanese semiconductor company has received a permit from the Taiwanese government to continue to supply ZTE.
The Telecom firm has also suspended its online store at its own website as well as at Alibaba Group’s e-commerce platform at Taobao which now shows “page being updated” message with no products to order.