US Bans ZTE From Buying Qualcomm Chipsets

Following a decision by the US Department of Commerce, ZTE can’t buy Qualcomm chips anymore. The Chinese company has been punished for violating the terms of a sanctions violation case, by banning all US companies from selling prohibited goods such as chipsets to ZTE. The force of the ban will be for seven years.

ZTE pleaded guilty last year to conspiring to violate US sanctions by illegally shipping US-made goods and technology to Iran. As part of the ensuing settlement, ZTE promised to lay-off four senior employees and punish 35 others by either reducing their bonuses or reprimanding them.

While the company has laid-off those four senior employees, it has admitted last month that it had not disciplined or reduced bonuses for the other 35. And that’s why this ban came to be. Obviously, it has the potential to severely impact ZTE’s business in a negative way. American companies are estimated to provide 25% to 30% of the components used in its equipment, ranging from networking gear to smartphones.

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