China’s ZTE paid over $2.3 bln to US exporters last year, ZTE source says
Chinese technology company ZTE Corp, which this month suspended its main operations after a US Commerce Department ban on American supplies to its business, paid over $2.3 billion to 211 US exporters in 2017, a senior ZTE official said on Friday.
ZTE paid over $100 million each to Qualcomm Inc, Broadcom Inc, Intel Corp and Texas Instruments, the official said.
As one of the world’s largest telecom equipment makers, ZTE relied on US companies such as Qualcomm and Intel for components.
The extent of the impact of the Commerce Department ban on US suppliers was noted by the ZTE official, who was not authorized to speak publicly, as Chinese and US government officials discuss a Washington visit next week by China’s top economic official.
In March last year ZTE paid nearly $900 million in penalties for exporting US technology to Iran and North Korea in violation of sanctions.
In April this year, the Commerce Department found ZTE had violated the terms of last year’s settlement and banned US companies from providing exports to ZTE for seven years. As a result, ZTE suspended its main operating activities earlier this month.
The Commerce Department ban on US suppliers exporting goods to the Chinese network equipment and handset maker was discussed when a delegation led by US Treasury Secretary Steven Mnuchin met with Chinese officials in Beijing last week.
China requested that President Donald Trump back off his threat of tariffs on Chinese imports, treat Chinese investments equally under US security reviews, and reassess the ban on ZTE.
A May 1 formal request by ZTE to the US Commerce Department for an immediate stay of the April 15 ban went unheeded, according to a person familiar with the matter. The order was causing “irreparable harm” to the company and partners, as well as millions of consumers, including those who own its phones and major network operators, the person said.
American companies are estimated to provide 25 percent to 30 percent of the components used in ZTE’s equipment, which includes smartphones and gear to build telecommunications networks, analysts noted.
The US ban prevents ZTE from using some Qualcomm processors and Android devices with Google Mobile Services software, according to analysts. (RTRS)