MediaTek has announced that it has withdrawn a plan to issue new shares for the planned merger with MStar Semiconductor.

MediaTek said it filed the capital expansion project with Taiwan's Financial Supervisory Commission (FSC) in late December 2012 and now decided to withdraw the plan, since it has postponed the target date for completing the merger to May 1 from January 1due to its inability to secure approvals for the deal from some foreign governments on time.

MediaTek said its target to merge with MStar remains unchanged and will resume the capital expansion project once the merger deal is cleared by related governments.

Shares of MediaTek and MStar were down NT$2.0 and NT$6.5 to close at NT$309.5 (US$10.7) and NT$203.5 respectively on the Taiwan Stock Exchange on January 16.