MediaTek Pauses Business with ZTE In Wake of Taiwan Order
Taiwan-based MediaTek today said it has halted its business dealings with China-based ZTE. MediaTek, along with other Taiwan companies that supply ZTE, received a memo from the government of Taiwan that orders it to obtain a permit before shipping any goods to ZTE. "What we do — asking suppliers to apply for an export permit — [is] for the companies' own good, to ensure they are doing legal business with the Chinese firms," said David Hsu, deputy director-general and spokesman for Taiwan’s Bureau of Foreign Trade. MediaTek's CEO today said the company would comply with the order during a call with analysts, suspending shipments to ZTE until it gathers the proper paperwork from the Taiwanese government. Without access to MediaTek chips, ZTE is truly in dire straights. The company is already forbidden to buy chips from U.S. suppliers, such as Qualcomm and Intel, thanks to a ban from the Department of Commerce. The company cannot build mobile phones without processors. ZTE did not immediately comment on the development. The news was first reported by the Nikkei.
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What's ZTE to do???