MediaTek seeking U.S. permit to supply Huawei

Taipei,  MediaTek Inc., Taiwan’s biggest IC design house, has applied for a permit from the U.S. government to sell chips to China’s Huawei Technologies Inc. after Washington tightened sanctions against the Chinese tech giant last week.

In a statement released Friday, MediaTek reiterated its stance that it abides by international trade regulations and was seeking a license from the U.S. government to ship products to Huawei.

MediaTek did not provide any further details on how it will apply for the permit or the argument it will make to support its case.

The moves come after the U.S. Department of Commerce added 38 Huawei affiliates to the U.S. government’s economic blacklist on Aug. 17 amid escalating tensions between Washington and Beijing.

The new measures raised the total to 152 affiliates on the list since Huawei was first added in May 2019.

According to the U.S. Department of Commerce, Huawei was working through the affiliates added to the list to secure chips through third parties and evade the U.S. restrictions.

Analysts said Huawei affiliates that were not on the list previously would source chips from third parties like MediaTek, which designs chips and has IC makers already affected by U.S. sanctions to make them. That loophole has now been closed, however.

Under the expanded restrictions, MediaTek will not be able to supply chips to Huawei after Sept. 14 unless it obtains a license to do so.

MediaTek has said the new moves against Huawei were unlikely to have a material impact on its short term operations and has left unchanged its third quarter guidance which predicted its sales will range between NT$82.5 billion (US$2.80 billion) and US$87.9 billion, up 22-30 percent from a quarter earlier.

But, a European brokerage has cut its forecasts for MediaTek’s earnings per share by 6 percent to NT$19.5 for 2020 and by 12.2 percent for 2021 to NT$28.73.


Source: Focus Taiwan News Channel

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