CHINESE SMARTPHONE MAKER ZTE has suspending operations just weeks after the US slapped the firm with a crippling seven-year sales ban.
"The major operating activities of the company have ceased," ZTE, which has 75,000 employees and recently ranked as the fourth most popular smartphone maker in the US, wrote (PDF) in a Wednesday announcement to stock market traders in Hong Kong.
ZTE noted that it maintains "sufficient cash" to keep its commercial operations up and running for now, but at the time of writing the firm's online stores are showing as "under construction."
What's more, according to a report at The New York Times, manufacturing has been halted at ZTE's plant in Shenzhen, with workers at the company's HQ telling the newspaper that they have been attending training sessions, napping or hanging out in their dormitories.
The company said on Wednesday that it's "actively communicating" with the US for a reversal of the import ban, which was enforced after the firm broke sanctions on sales to North Korea and Iran.
While ZTE originally settled the breach by handing over $900m, the firm violated the settlement by failing to make good on its promise that it would dismiss four members of senior staff and discipline 35 more.
"Instead of reprimanding ZTE staff and senior management, ZTE rewarded them. This egregious behaviour cannot be ignored," Wilbur Ross, the US secretary of commerce, said last month.
It's hard to imagine that the Trump administration - which just last week banned Huawei and ZTE devices from military bases in the US - will change its mind, given the US gov's long-standing viewpoint that Chinese tech firms pose a threat to national security.
And it's unlikely that ZTE will be able to recover from the ban either, as according to Reuters, US manufacturers provide up to a third of the components used in ZTE's network equipment and smartphones.
American chipmaker Qualcomm, for example, provides the innards for more than half of ZTE's phones shipped globally and almost all of its phones in the US, according to Counterpoint, and it's thought the seven-year-ban has also cost the Chinese company its Android license. µ
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