The Chinese vendor said it is accelerating investments in R&D
Chinese vendor ZTE’s production activities have returned to normal, following a U.S. import ban which severely impacted the firm’s business, international press reported.
The vendor also said its carrier network business is on track for growth next year.
Newly elected Chairman Li Zixue revealed that the vendor’s operating business has resumed completely, during a presentation at the company’s annual shareholder meeting.
The executive also highlighted that ZTE’s production targets for August had normalized and activities in the research and development segment are resuming rapidly.
ZTE CEO Xu Ziyang also said that despite the import ban, which had affected the firm’s performance and business, the company “is still in the front line” in the communications industry.
“Our orders have been great and are in line with that of July and August last year,” he said, adding that ZTE’s network operating business will resume a normal growth during next year.
Xu also said that the vendor will increase efforts in R&D, mainly in the chip segment, and strengthen ties with additional chip makers.
Previous press reports said that ZTE lost at least $3 billion after suspending its operations following the ban imposed by U.S. authorities.
ZTE recently secured financing of around $10.5 billion in order to resume normal business, according to previous reports.
The seven-year ban had been imposed by the Department of Commerce’s Bureau of Industry and Security (BIS) in March this year after the vendor allegedly did not live up to the terms of an agreement that had been worked out after it illegally shipped telecom equipment to Iran and North Korea. In early May, ZTE ceased its major operating activities due to the ban, which did not allow U.S. firms to ship key components including chips to ZTE.
The U.S. Department of Commerce formally lifted a ban on U.S. companies selling components and software to ZTE, after it complied with all the requirements of a settlement agreed to in June.
On July 13, Secretary of Commerce Wilbur Ross announced that ZTE had placed $400 million in escrow at a U.S. bank. Shortly after the deposit, the Department lifted the denial order on ZTE. The escrow funds are in addition to the $1 billion penalty imposed by Commerce that ZTE paid to the U.S. Treasury last month.
The government said that the $1.4 billion paid under the new settlement agreement are in addition to the $892 million in penalties ZTE has already paid to the U.S government under a March 2017 settlement agreement.
Last week, the U.S. government appointed Roscoe Howard Jr. to be the special compliance coordinator (SCC) for Chinese vendor ZTE.
The special compliance coordinator’s function will be to coordinate, monitor, assess, and report on compliance with U.S. export control laws by ZTE, its subsidiaries, and affiliates worldwide. The Department of Commerce said that the coordinator will operate with unprecedented access across the company.
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