HONG KONG (Reuters) - ZTE Corp’s (0763.HK) (000063.SZ) main business operations have ceased due to a ban imposed by the U.S. government, but China’s second biggest telecom equipment maker is trying to have the ban modified or reversed, it said on Wednesday. 
 
 FILE PHOTO: A ZTE smart phone is pictured in this illustration taken April 17, 2018. REUTERS/Carlo Allegri/Illustration/File Photo 
 
 ZTE was hit by a ban last month from Washington, forbidding U.S. firms from supplying it with components and technology after it was found to have violated U.S. export restrictions by illegally shipping goods to Iran. 
 
 “As a result of the Denial Order, the major operating activities of the company have ceased,” ZTE said in the exchange filings late on Wednesday. 
 
 “As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject in compliance with laws and regulations,” it said. 
 
 The U.S. action, first reported by Reuters, could be devastating to ZTE. 
 
 As one of the world’s largest telecom equipment makers alongside Huawei [HWT.UL], Ericsson (ERICb.ST) and Nokia (NOKIA.HE), ZTE relies on U.S. companies such as Qualcomm (QCOM.O) and Intel (INTC.O) for up to a third of its components. 
 
 FILE PHOTO: People stand at ZTE's booth during Mobile World Congress in Barcelona, Spain, February 27, 2017. REUTERS/Paul Hanna/File Photo 
 
 Analysts have said it will be hard for ZTE to stay competitive even if it could find non-American suppliers. 
 
 Taiwanese semiconductor company Mediatek (2454.TW) said last week it had received a permit from the Taiwanese government to continue to supply ZTE. 
 
 ZTE said it was actively communicating with the U.S. government “in order to facilitate the modification or reversal of the Denial Order by the U.S. government and forge a positive outcome in the development of matters.” 
 
 The ban that threatens to cut off ZTE’s supply chain came amid heightened tension over a possible U.S.-China trade war. The Chinese government raised the issue of ZTE last week with a visiting U.S. trade delegation. 
 
 ZTE said on Sunday it had submitted a request to the U.S. Commerce Department for the suspension of the ban. 
 
 ZTE appears to have suspended its online stores on its own website as well as on Alibaba Group’s e-commerce platform Taobao over the past few days, which display a “page being updated” message with no products to order. 
 
 The Chinese firm did not respond to calls and messages from Reuters seeking comment. 
 
 Consumer Cellular Inc, a U.S. wireless operator, said ZTE was unable to continue supplying phones after the sanctions, but had asked the company to hold inventory spots open as it worked to resolve the export ban, said Consumer Cellular Chief Executive John Marick in an interview. 
 
 Marick said ZTE has not given guidance on whether its phones can continue receiving software updates from Android, and discussions between the companies have been about ensuring ZTE can supply parts and service to honor phone warranties. 
 
 A ZTE employee told Reuters that staff had been reporting to work as normal but “with not much to do”. The employee, who declined to be named, said business trips had been halted. 
 
 Employees at ZTE’s headquarters in the southern Chinese technology hub of Shenzhen were cagey about speaking to reporters after the ban was announced, but some voiced concerns. 
 
 One employee said this was the “the biggest challenge” for ZTE since he joined 10 years ago. Another said he hoped the Chinese government would help, saying he was confident President Xi Jinping would “sort out this trouble”. 
 
 ZTE settled the sanction case with the U.S. government last March after admitting to illegally shipping products with U.S. technology to countries including Iran and paying a record fine of nearly $900 million. 
 
 Last month, the U.S. government reactivated the ban after it said ZTE violated terms of the settlement and made repeated false statements, which ZTE disputed. 

 Last month, Washington dealt a major casualty in the standoff with Beijing over technology when the US commerce department ordered American companies to stop supplying components to China’s ZTE, the fourth-largest handset brand in the US. 
 
 The US penalty came in response to ZTE’s violations of Iran sanctions, and a failure to comply with a guilty plea agreement the telecom manufacturer made. But it also arrived as tensions between China and the US over technology reach new highs. Already, the Shenzhen-based company is facing a painful aftermath. Today (May 9) the company filed a notice (pdf) to the Hong Kong Stock Exchange stating “major operating activities of the Company have ceased.” 
 
 The company’s page on Tmall (link in Chinese), one of China’s major e-commerce sites, doesn’t link to any product listings. Instead, it states that the page is “undergoing maintenance,” and shows a photo of rowers alongside text that roughly translates to “Youth is a time for fighting.” 
 
 (Tmall) 
 
 Links to the company’s official online page for its phone catalogs direct users to the same image. The Nikkei Asian Review reports that some carriers in China are continuing to sell ZTE phones in their retail outlets but are nearly out of stock (paywall), with one employee saying production was stalled. The company’s page on JD.com, another Chinese e-commerce site, remains up and running. ZTE could not be reached for comment. 
 
 When the US restrictions were first announced, analysts stated the move would cripple ZTE in the short term, at best relegating it to a maker of rudimentary smartphones with out-of-date technology. Over 50% of its smartphones come packed with processors from San Diego-based Qualcomm, while the bulk of its remaining devices rely on chipsets from Taiwan’s MediaTek. While ZTE can continue to rely on MediaTek to supply it for mid-range devices, no chipmaker other than Qualcomm can adequately power the company’s high-end devices (paywall). 
 
 On Sunday, ZTE said in a filing to the Shenzhen stock exchange, where its shares are also traded, that it had asked the US commerce department to suspend the sales ban. Meanwhile, the penalty will likely serve as a further impetus for Beijing to improve its domestic semiconductor industry and become less reliant on foreign companies like Qualcomm. A state-backed investment fund known as the China Integrated Circuit Industry Investment Fund Co. is currently raising 300 billion yuan ($47.4 billion) (paywall) to finance Chinese homegrown semiconductor firms. 
 
 This story has been updated to show ZTE has filed a notice with the Hong Kong Stock Exchange. 

 SHENZHEN, China — Not Apple. Not Huawei. The first casualty of the high-tech cold war between the United States and China might be the biggest electronics maker you’ve never heard of. 
 
 The Chinese firm ZTE said on Wednesday it had ceased “major operating activities” after the Trump administration banned the company last month from using components made in the United States. With manufacturing halted at the ZTE plant in Shenzhen, factory workers have been getting called in for training sessions every other day or so — a snooze, they say. The rest of the time, they loaf around in nearby dorms. 
 
 Trading in the company’s shares has been suspended for weeks. Staff members have been instructed, in new guidelines reviewed by The New York Times, to reassure anxious clients, while being sure to avoid discussing with them the American technology from which the firm is cut off for the next seven years. 
 
 One of China’s most internationally successful technology suppliers, with about $17 billion in annual revenue, ZTE is facing a death sentence. The Commerce Department has blocked its access to American-made components until 2025, saying the company failed to punish employees who violated trade controls against Iran and North Korea.
– In a move that is roiling the telecom industry worldwide, a global telecom equipment-maker has halted its main business operations. The announcement comes after ZTE, China’s second-largest telecom equipment company, was found by the US to have illegally shipped its products to Iran, per Reuters. In response, the US Department of Commerce banned US firms from supplying tech and parts to the company until 2025, according to the New York Times. ZTE relies heavily on US companies to supply as much as a third of its components. Those companies include San Diego-based Qualcomm, which supplies processors for more than half of ZTE's smartphones, per Quartz. ZTE, the fourth-largest smartphone vendor in the US, does business with more than 160 countries and employs 75,000 people; the Times calls it the "biggest electronics maker you've never heard of." Saying it has improved its compliance, ZTE has asked for a stay on the ban and supplied supplemental data bolstering its case to the Commerce Department. But the Commerce Department has asserted that ZTE’s practices were egregious and included a surreptitious system to sell American-made goods in Iran. Then, to hide its activities, ZTE allegedly lied and deleted emails to cover its tracks and actively sought to resume shipments during the investigation. ZTE had settled its sanctions case with the US with a record $900 million fine, but the US reactivated sanctions last month after the company allegedly violated settlement terms. “For other companies thinking about how to follow the rules and manage internal risks, I think this is going to serve as a wakeup call,” a market researcher tells the Times. For now, ZTE's manufacturing is halted, leaving employees to attend every-other-day training sessions and hang out in company dorms.