MediaTek recently asked the U.S. Commerce Department for a license to sell semiconductors to Huawei, reports the South China Morning Post. In May, the government agency announced new regulations that prevent chipmakers from selling certain American-designed microelectronics and software to the conglomerate.
As a result, Huawei lost access to a vital component vendor, and revealed it is facing a processor shortage fee.
How MediaTek Could Help Huawei
If the Commerce Department grants MediaTek’s request, the firm could help save the telecom’s handset business.
Huawei found success in the global smartphone market because of the quality of its Kirin central processing units (CPUs). The company’s handset processors, developed by its HiSilicon division, have been positively compared to Apple and Qualcomm’s chipsets. However, the brand’s production partner, Taiwanese Semiconductor Manufacturing Company (TSMC), ended their business relationship following the Commerce Department’s announcement.
The telecom reportedly inked deals with the Semiconductor Manufacturing International Corporation (SMIC) and Shanghai Microelectronics to work around Washington’s new export controls. But those fabricators lack the technological resources to make 7nm nodes for the Kirin series.
However, MediaTek could provide its old partner with a variety of leading-edge processors and 5G modems.
The Taiwanese brand specializes in developing quality parts for low, mid, and high-end mobile devices. The brand’s recently unveiled 7nm Dimensity 720 CPUs have 5G connectivity, support 90GHz refresh rates, and comes equipped with Arm Mali-G57-MC3 graphics processors.
That means, with Washington’s approval, MediaTek could conceivably succeed TSMC as Huawei’s chief chipset source.
Can MediaTek Secure a Trade License?
Right now, the Commerce Department likely does not have a favorable view of MediaTek’s license request. The agency enacted its new export controls to close loopholes in its 2019 trade restrictions that allowed Huawei to keep buying American developed technology. Therefore, the agency probably does not want to contravene its latest policy updates.
On the other hand, there are a few reasons why the Commerce Department might approve MediaTek’s request.
For one thing, the agency granted Intel, Micron, and Xilinx licenses to continue trading with the telecom. So, MediaTek securing the government organization’s approval to sell chips to a blacklisted company would be improbable, but not impossible.
In addition, the Taiwanese chipmaker has business relationships with a few leading American technology companies. Consequently, Intel, Google, and AMD executives could plead the firm’s case to U.S. officials.
Either way, the Commerce Department’s judgment of MediaTek’s license request will have big implications for the semiconductor manufacturer. Market analysts expect the loss of Huawei’s business to hurt the firm more than its contemporaries. But if the chipmaker secures an export control exemption, its business could enter a major growth phase.