Taiwan-headquartered chip designer MediaTek received an export permit from the Taiwan government to sell components to ZTE, the Chinese telecoms equipment and handset maker blocked from importing hardware from US companies.
The trade restrictions on ZTE were ordered last month after the US government determined the vendor made false statements during an investigation which found it had violated trade sanctions with Iran, by shipping US telecoms equipment to the country.
A representative with Taiwan’s Bureau of Foreign Trade told Reuters the government also received applications for export permits from several other tech firms.
The official said Taiwan has its own control mechanisms, which are independent of the way the US looks at things, adding “the mechanism will consider America and other advanced countries’ controls”, Reuters reported.
Approval from Taiwan is significant as it will give ZTE an alternative supplier to US-based Qualcomm. In recent years there has been no shortage of tension between Taiwan and China, and a disruption in its relationship with MediaTek would have been a major blow to the already reeling ZTE.
Meanwhile, ZTE said in a filing to the Shenzhen stock exchange it asked the US Commerce Department’s Bureau of Industry and Security to suspend the trade ban, when it provided additional material at the bureau’s request.
China last week reportedly appealed to the US for an amendment to the seven-year restriction imposed on US companies from selling services and equipment to ZTE.
ZTE said it will fight the restrictions, which it called unfair and ignores the progress it made on export compliance.
If the export ban is upheld, the Shenzhen-based company could feel a significant impact on its handset business as it becomes unable to source silicon from the likes of Qualcomm.