TAIWAN CHIPMAKER PROFITS FROM US CURBS ON HUAWEI

MediaTek, a $553-million Taiwanese company known for making low-cost smartphone chips, is expected to dodge impacts from US curbs on Chinese tech giant Huawei by playing up its diverse client roster and a growing focus on Asian markets where cheap phones are the norm, writes Ralph Jennings for the Asia Times Financial.

The listed company sells to Chinese phone brands other than Huawei, and this year it’s coming out with processors for both middle-end 4G and 5G phones. MediaTek is bullish on China as 5G takes off, company corporate sales general manager Finbarr Moynihan told Asia Times Financial in September. At the same time, he said, the company is betting on 4G expansion in India. 

“I think MediaTek is closer to the beneficiaries” of the Huawei storm, said Brady Wang, analyst with Counterpoint Research in Taipei. “MediaTek can offer many options for middle and low-end smartphone applications processors. On the other hand, although the share of 4G will be squeezed by 5G, its demand remains healthy.” 

The US Department of Commerce last year put Huawei on its Entity List of companies barred from doing business with any organization in the United States. In May this year, the department’s Bureau of Industry and Security stopped Huawei from acquiring semiconductors based on American software and technology. Washington believes Huawei has acted illegally and on behalf of the Chinese government. A bureau order effective September 15 added 38 Huawei affiliates to the Entity List and restricts transactions where US software or technology is used in a foreign-produced item sold to Huawei.