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MediaTek Seeks US Permission To Supply Huawei With Chips

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MediaTek has applied to the U.S. government for permission to continue supplying China’s Huawei.

- Updated: 30th Aug 2020, 10:21 IST

Taiwan’s MediaTek has now applied for U.S. permission to supply Huawei with chips.

After a ban imposed on the company last year, the U.S. government granted the company a temporary general license (TGL) to conduct limited business with U.S. companies. The U.S government also asked all parties who wish to conduct business with Huawei to submit license applications for transactions.

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What is the issue?

The U.S. government imposed trade restrictions on Huawei last year. Following allegations that the company was selling user data to the Chinese government for spying. However, Huawei has completely denied these allegations over and over.

But there are now new issues for the company as Qualcomm and Samsung unavailable as alternative options due to the ban. MediaTek was the only existing company possible to sell them chipsets. It is the only company that can provide the amount of silicon it needs. Huawei is in distress as it cannot produce it themselves anymore. Moreover, a phone cannot function without its processor.

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But, the company has confirmed it intends to follow the Huawei ban rules. “MediaTek reiterates its respect for following relevant orders and rules on global trade and has already applied for permission with the US side in accordance with the rules,” it says in a statement.

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These latest restrictions on Huawei by the Trump administration aim to close all loopholes. These loopholes allowed the company to purchase U.S. technology from third-parties. This continuation could have a drastic impact on the company.

TSMC, which manufactures Kirin mobile chipsets for Huawei, stopped taking new orders from the Chinese company soon after the new rule change was announced by the U.S. Commerce Department in May. It has also confirmed that it will not be shipping chips to Huawei after September 15.

However, this ban starting from September 15th prevents even MediaTek from working with Huawei. 

At this point, it is a waiting game for Huawei and MediaTek.

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Highlights of the Story

  • MediaTek has formally applied for permission to continue supplying chips to Huawei.
  • After September 15, if MediaTek doesn’t earn a license, Huawei will no longer be able to buy MediaTek chips.

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