U.S. and United Kingdom blacklist China's ZTE

Optical Stocks Under Pressure After US Bans Sales To ZTE

Efforts to reach ZTE America in Richardson, Texas, were unsuccessful. It is not clear if the ban extends to shipments by those suppliers from foreign ports; the Commerce Department said it will get back to me on that matter. Qualcomm is perhaps the most recognizable name in the world of smartphone SoCs; the brand is the leader in the mobile silicon market, thanks in large part to the prolific use of its Snapdragon line of chips.

The agreement that was violated stemmed from ZTE's attempt at conspiring to illegally ship U.S. goods to Iran a few years back, which it had already paid heavy fines from. Well, companies like Qualcomm, Microsoft, and Intel all supply ZTE with components. ZTE has been buying the hardware from the USA companies and using in its products which are later shipped to Iran and North Korea. The company was also supposed to revoke the bonuses of any employees involved. However, the U.S. Commerce Department has caught ZTE in a lie; the Chinese tech firm paid bonuses for 2016 to all but one of the employees that had engaged in illegal conduct. "Instead of reprimanding ZTE staff and senior management, ZTE rewarded them".

"NCSC assess that the national security risks arising from the use of ZTE equipment or services within the context of the existing United Kingdom telecommunications infrastructure can not be mitigated", NCSC Technical Director Ian Levy said as quoted in a press release.

A denial of export privileges means that ZTE will not be able to purchase mobile components from American companies. Through its network of operators across 140 countries, the company delivers innovative products and business solutions.

But the bureau found the reasons behind the failure to comply are "red herrings to ... concerns that the company has repeatedly made false statements to the USA government - as the company has now repeatedly admitted".

The US action also comes amidst a brewing trade fight between Washington and Beijing after the Trump administration announced tariffs on $50 billion worth of Chinese goods coming into the US, as well as planned tariffs on an additional $100 billion worth of Chinese goods.

Dolby is another American company that has partnered with ZTE in the past. Its shares were last traded at HK$25.6 at the close in Hong Kong on Monday.

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