Last year, the US government effectively banned Huawei from doing business with US companies, citing Huawei’s role as a potential spy for the Chinese government. In addition, the US also prohibited any company that uses US technology to conduct business with Huawei. Even with such a wide-ranging ban, Huawei managed to grow significantly, mainly due to its skyrocketing sales in China.
This year, the US took things further and forced chipmakers to stop selling or making chips for Huawei. As a result, Huawei can no longer basically employ TSMC to make the Kirin chips that the company uses in its smartphones. Now, MediaTek, which is one of the chipmakers that can sell its processors to Huawei, is applying to the US for a license to continue its business with the Chinese giant after the September 15 deadline.
If MediaTek is licensed, Huawei will be entirely dependent on MediaTek for its chip supplies. That could be a big business boost for MediaTek. In fact, the chipmaker reportedly already has a stock of 30 million 5G chips for Huawei that it will not be able to sell to Huawei after September 15. Of course, these chips can still be sold to other manufacturers, including such as Xiaomi, Vivo, and Oppo. However, most of those companies can also buy Qualcomm chips.
In response to the US Department of Commerce adding 38 more Huawei subsidiaries to the list of entities with which companies are not allowed to do business, MediaTek reportedly said, “We had always followed the rules and regulations trade-related global standards and we’re paying (sic) to pay close attention to changes in US export control regulations and consult with outside legal counsel. We will obtain the latest regulations and conduct legal analyzes to ensure compliance with the relevant regulations. Based on the evaluation of the existing information, it does not have a significant impact on the short-term operating conditions of our company ”.
As for Huawei, the company is not backing down either. An insider from Huawei quoted by Gizchina said: “Last night we had another meeting until midnight. The attitude of the boss is to step forward and die rather than step back. “