ZTE is one of the many companies that source mobile processors from Qualcomm and it has done so for quite some time now. However, a new ban has been put in place by the United States Department of Commerce which will make it impossible for ZTE to source processors from Qualcomm and components from other suppliers based in the United States. The seven-year ban has been placed on ZTE for violating the terms of a sanctions violation case, according to U.S. officials.
ZTE was accused to circumventing U.S. sanctions on Iran back in 2016. Despite the fact that it’s a company based in China, ZTE was found to be selling technology from the U.S. to Iran through multiple shell companies. The Department of Commerce warned that ZTE could be banned from sourcing from its U.S. suppliers and it avoided that by paying $890 million in fines and penalties.
It had also promised to fire four senior employees and reprimand 35 others as part of the agreement but ZTE admitted in March that while it did fire the four employees, it didn’t reprimand the others.
Reuters quotes a senior department official who said that the company “provided information back to us basically admitting that they had made these false statements.”
The Department of Commerce announced today that all companies based in the United States can no longer sell components from ZTE due to its violation of the terms of the sanctions case. This means that among other things, ZTE can no longer buy Snapdragon processors from Qualcomm, which is likely going to be a big blow for the company’s future plans.