The battle of the Chinese manufacturers against the United States continues, and in this new episode, ZTE is the one affected, since from now on it will not be able to use components of American companies for a minimum of seven years. And if that were not enough, the UK joins the comments against ZTE. And even more, this will affect the company’s phone manufacturing line since ZTE can’t buy Qualcomm chipsets anymore.
The United States Department of Commerce (DOC) has just announced a ban on US exports to ZTE, which means that the Chinese manufacturer will no longer be able to use technology or components from companies such as Dolby or Qualcomm, including the renowned Snapdragon processors.
Between 25% and 30% of the components of ZTE were Made In USA, until now
The sanction against ZTE comes after the Chinese company pleaded guilty in 2017 for the illegal shipment of US equipment to Iran and North Korea.
As part of the agreement, ZTE pledged to fire four senior executives and apply sanctions to another 35 employees for participating in these “illegal” actions.
The detail is that ZTE did not comply with a part of this agreement.
The first accusations against ZTE were for “conspiring to violate US sanctions by illegally sending US goods and technology to Iran,” so the Chinese company had to pay $1.2 billion.
But last March, ZTE admitted that only four officials had been fired, but the other 35 were still working in the company.
Given this, the DOC prohibits US companies from selling components to ZTE for seven years.
This would significantly affect the Chinese manufacturer since it is estimated that between 25% and 30% of the components used in both smartphones and network equipment come from the United States.
The United Kingdom joins the USA
The United States is not the only one targeting ZTE, as the National Cybersecurity Center of the United Kingdom has also issued a letter addressed to the telecommunications sector, warning about the use of ZTE devices since they could be “a risk to national security.”
In conclusion, the measures taken by the US government against the Chinese manufacturer will also reflect on the latter’s smartphones production and their quality, subsequently, since now ZTE can’t buy Qualcomm chipsets anymore, while, until now, up to 30% of the components used by ZTE were made by US companies.