We were grounded by our parents, its usually no internet and games for a week, but when a company get ‘grounded’ it’s far more serious. In the case of ZTE, it’s a seven-year banned from buying any Qualcomm chips.
This issue came about when ZTE pleaded guilty last year to violating US Sanctions by illegally shipping US-made goods and technology to Iran. As part of their settlement, ZTE promised to fire four senior employees and reducing bonuses of 35 other employees. They have fired the four senior employees but did not reduce the bonuses of those 35 employees, which is why this ruling came to be. This is a huge blow to the company as Snapdragon processors are chips that people sought after.
The ZTE Axon 9, which is the company’s upcoming flagship phone that is supposed to come with a Snapdragon 845 might be in trouble. With this ban, it looks like ZTE will most probably delay the release of the phone to search for another chip supplier or figure out a solution to this ban.