China Telecom considers MediaTek acquisition

China Telecom is seeking to acquire Taiwan-based fabless semiconductor maker MediaTek, according to media sources in the region.

Newspapers in Taiwan and China have reported China Telecom covertly buying MediaTek shares through mediators on the second tier open market.

Speculation is that China Telecom will show its hand once it owns a majority of shares.

An insider from China Telecom confirmed the news, but added that only a small number of high level staff know about the plans.

MediaTek denied the rumour, saying it has ‘no idea’ about any acquisition attempts.

If China Telecom were to work more closely with MediaTek, it would be able to expand its product portfolio beyond CDMA to include other segments.

MediaTek is the second largest chip provider in the world, with a 20% market share. Company sales in 2007 were $2.5 billion.

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