MediaTek cuts off ZTE over Taiwan's new approval requirement

ZTE faces growing problems following a recent US ban that prevents the nation's companies from selling hardware to the Chinese company. According to recent reports, Taiwan's government has ordered local companies to stop doing business with ZTE until they get approval to resume. MediaTek is one of those companies, and it has confirmed that it has ceased doing business with ZTE for now.READ: US hits ZTE with huge ban

Under the US ban, American businesses are not allowed to sell hardware to ZTE for the next seven years. That restriction is due to ZTE's violation of US sanctions; it was caught and later admitted to shipping goods to Iran and North Korea. Due to the US ban, ZTE is now cut off from major firms like Intel and Qualcomm.

That was a serious blow for the company, one now made worse by the Taiwanese government's decision. However, according to Reuters, the government's decision isn't a ban like the one ZTE faces in the US. Companies in Taiwan can still do business with ZTE, they just need to get approval first.

Talking about the decision to Nikkei is Taiwan's Bureau of Foreign Trade deputy director general David Hsu, who explained: "What we do (asking suppliers to apply for an export permit) was for the companies' own good, to ensure they are doing legal business with the Chinese firms."

Early this morning, MediaTek confirmed that it received a government notice about the requirement and has now stopped working with ZTE. It is unclear how long it will take for companies to get approval to resume working with ZTE.

SOURCE: Reuters