MediaTek Is Reportedly Reducing 5G Chip Supply To Huawei

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The US government has reportedly managed to persuade MediaTek to reduce the flow of 5G chips to Huawei. That's according to unconfirmed reports out of China. The reports indicate that Qualcomm may be trying to step in and replace those orders. That's pending approval of a license to sell the chips, which the company has reportedly applied for.

If accurate, the reports suggest that the US has coerced MediaTek to step back, with Qualcomm filling in instead. Qualcomm is expected, the reports indicate, to attain approval by mid-July.

From a US perspective, convincing MediaTek to step aside in favor of US-based Qualcomm makes sense. Although a special license would be required, that would put Qualcomm components back in the companies smartphones on its own terms. That's as opposed to doing so on Huawei's terms. The company has effectively been banned in the US alongside accusations that it engages in Chinese government-sponsored spying.

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MediaTek calls out reports about 5G chip shipment reductions 'groundless'

The chipset manufacturer has reportedly denied the claims, for its part. In fact, MediaTek reportedly calls out news of a reduction in 5G chip sales to Huawei "groundless."

Furthermore, Taiwan's Ministry of Economic Affairs has stated that it's received no such request from the US. So the implication here is that, for now, the reports seem to be unfounded. Or, at the very least, that neither MediaTek nor the Taiwanese government is ready to comment on the matter.

These companies are unlikely to reduce business interactions

MediaTek is presently one of several companies Huawei has turned to in order to offset the loss of its primary chip supplier, TSMC. The Chinese tech giant has faced growing challenges to source chips amid US sanctions.

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This wouldn't be the first time rumors have swirled about the relationship between the two companies, either. MediaTek has also been forced to come forward and deny that it would illegally supply rebranded TSMC chips to Huawei. Huawei, meanwhile, has been seeking to partner with companies, including MediaTek to build out its own design-to-sales chip business.

Since MediaTek could potentially step in to fill the gap left by TSMC with regard to what is arguably the largest smartphone OEM on the planet, it seems unlikely that MediaTek would be looking to give up its partnership with Huawei on 5G chips.