MediaTek Applies for ZTE Shipment Permit Under Government Order

Taiwanese chip designer MediaTek said it will comply with a government order to apply for a permit to export products to ZTE Corp, a Chinese telecoms equipment maker subjected to restrictions in the United States.

The US government this month banned American firms from sales to ZTE for seven years, saying the company had failed to comply with a settlement related to ZTE shipping US-made goods to Iran in violation of US sanctions.

ZTE said the ban, imposed as the United States and China spar over import tariffs, threatened its survival.

On Monday, a MediaTek representative told Reuters that the order from the Taiwanese economic ministry's foreign trade bureau was more a routine measure to protect Taiwanese firms than about Sino-US trade relations.

"Our company is actively preparing related documents to apply for an export permit to ZTE," MediaTek said in a stock exchange filing on Saturday. "With hopes that we can quickly obtain the export permit, we will then follow the law and proceed with smooth shipping."

The filing also quoted co-CEO Rick Tsai in a local news article saying "the short-term impact will be limited" while MediaTek complies with the order.

David Hsu, deputy director general at the Bureau of Foreign Trade, confirmed to Reuters that companies wanting to ship goods to ZTE will now need to apply for permission.

"We need to confirm that their shipments are not related to nuclear bombs, chemical bombs, and the like, then after that it is permissible," Hsu said by phone. "In the past, we had similar regulations, we just didn't name a company. But now we've made it a bit clearer."

© Thomson Reuters 2018