MediaTek To Ship Components To ZTE In Wake Of U.S. Ban

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Taiwanese chipset manufacturer MediaTek will reportedly have the opportunity to fill in some holes in smartphone maker ZTE’s supply chain, following the recent ban on sales by companies within the U.S. That’s according to new reports that MediaTek has attained permission from the local government via the Bureau of Foreign Trade to begin shipping to the company. Taiwan is taking a different approach to other countries in handling the situation with ZTE, though the OEM is still on the government’s watch list. It is effectively allowing components exporters to apply for permission to ship products to ZTE and several other companies also applied. However, there’s been no word on whether any of the other applications were approved or which companies those might have been. The foreign trade offices and MediaTek have both affirmed the permit, with government officials citing a need for avoiding the creation of obstacles for exports from high-tech factories within the country.

In the meantime, there’s no word on the length of the MediaTek permit either but the U.S. ban on shipments to ZTE is set to be effective for no less than seven years. For those who may not have been following developments, the current circumstances stem from ZTE pleading guilty to a conspiracy to violate U.S. trade sanctions imposed on Iran. That was discovered internally by ZTE and self-reported to the U.S. government, resulting in $892 million in fines as well as restructuring and firings at the company. The ban itself was a consequence of the Commerce Department discovering that some 35 individuals involved in the initial violation had not faced any repercussions. Industry experts also believe the firmness of the action was spurred, at least in part, by ongoing trade tensions between the U.S. and ZTE’s home country of China. That’s thought to have been exacerbated by ZTE’s ties to the Chinese government.

ZTE had been heavily reliant on U.S. companies such as Qualcomm prior to the ban. So the introduction of MediaTek’s SoCs into its smartphones and other devices seems to be the most likely outcome of the permit being granted. That could be a huge windfall for MediaTek, particularly if the ban remains in place for the full term. In the meantime, both China and ZTE have been protesting the harshness of the ban and ZTE may make an appeal under U.S. law.