The Taiwanese government orders all local companies to obtain approval before they ship components to ZTE. It is not known whether this is an order from the US or indeed the Taiwan government has its own reasons for issuing the rule.
This rule makes ZTE worse off. The reason, ZTE is no longer able to get the required technology component intake for its products from the US, such as Qualcomm's chipset made.
Given the new rules of the Taiwan government, ZTE's plan to use alternative chipsets from MediaTek will be disrupted. Because MediaTek cannot deliver chipset components to ZTE without government approval.
MediaTek CEO Rick Tsai himself has confirmed that they are currently suspending business with ZTE after receiving a warning letter from the government.
However, the Taiwan government issued a statement that they are not actually preventing companies in Taiwan to do business with ZTE. "What we are asking suppliers is for the good of the companies themselves, to ensure they are engaged in legal business with Chinese companies," said Taiwan's Deputy Director-General Bureau of Foreign Trade.
"We do not block Taiwanese companies from doing business with ZTE There is no reason for the government to refuse permission if their business is legal," he concluded.