© Press Association Images
© Press Association Images

Suppliers respond to ZTE sales ban

31 March 2016

Suppliers have responded to restrictions by the US Department of Commerce on exports to Chinese telecommunications firm ZTE Corporation.

The Department of Commerce has placed restrictions on sales to the firm for allegedly exporting to sanctioned countries. The restrictions were published as a final rule action in the Federal Register amending the Export Administration Regulations with four additions to the Entity List, including ZTE Corporation and three subsidiaries. The US government has determined they are acting contrary to the national security or foreign policy interests of the United States.

Optical communications solutions provider Oclaro which sells products to ZTE, said revenues to date from ZTE were projected to exceed 10% in Oclaro’s third fiscal quarter of 2016. It said it expected its results for the third fiscal quarter to be at the low end of the guidance ranges that it had provided in February.  

In a statement, Oclaro said that it was “reviewing the impact of this action by the Department of Commerce on our ability to continue to ship products to ZTE”. It said that it intends to "fully comply with the Department's final rule”.

Optical and photonic product manufacturer Lumentum said that its sales to ZTE were less than one percent of the company’s total sales during the first half of fiscal 2016, and recent business levels had not been material.

Integrated Device Technology (IDT) said that ZTE-related revenue had historically ranged between approximately $3m (£2.1m) and $4m (£2.8m) per quarter, and that it expected minimal impact on its current fiscal fourth quarter.

However it added the ruling could “cause changes to revenue trends beginning in its first fiscal quarter of 2017, ending July 3, 2016”.

In a statement it said: “The magnitude and longevity of any impact will depend on the timing and specific rebalancing that may occur across the company’s customer base for related applications in similar end markets. 

“The company currently believes that any adverse impact will be transitory, as IDT is strongly positioned across a wide range of customers and applications in communications infrastructure.”

In a statement about the restrictions, ZTE said that it was fully committed to compliance with the laws and regulations in the jurisdictions in which it operates.

“ZTE has been cooperating, will continue to cooperate and communicate with all US agencies as required. The company is working expeditiously towards resolution of this issue,” it said.

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