Two major Taiwanese chip makers are set to merge after China's anti-trust regulator approved the deal with only minor provisions.
The thumbs-up from China's Ministry of Commerce (Mofcom) will enable MediaTek's $4bn purchase of MStar Semiconductor to proceed, given both companies' operations are in China.
One reservation is that MStar must keep its liquid-crystal display television chip businesses as a separate entity for at least the next three years in order to ensure fair competition in the market, according to a statement posted on Mofcom's website.
MediaTek is a fabless semiconductor designer specialising in wireless communications and networking. It has been responsible, in particular, for a range of ARM-based chip designs popularly used in Android tablets. It had annual revenues of NT$99.3m (£2.14bn) in 2012.
MStar Semi, meanwhile, specialises in application specific integrated circuits (ASICs) for the consumer and communication product markets. MStar is particularly strong in LCD controllers, analogue and digital televisions, set-top boxes, and mobile communication applications.
Both companies are partners and licence holders for various items of ARM intellectual property.
The companies say that the deal will close by February next year after Mofcom signs off on their plans to implement the conditions imposed by the regulator.
Mofcom said that the conditions were necessary because the combined company would give MediaTek more than 60 per cent of the global market for LCD television chips - more than 80 per cent in China. The combination will therefore pose a threat to global competition, according to Mofcom.