Taiwan Semiconductor Manufacturing Company (TSMC) has halted shipments to Chinese chip designer Sophgo after discovering one of its chips on Huawei’s AI processor, Ascend 910B
China Huawei processor.
Taiwan Semiconductor Manufacturing Company suspended shipments to China-based chip designer Sophgo after a chip it made was found on a Huawei AI processor, according to two people familiar with the matter.
Sophgo had ordered chips from TSMC that matched the one found on Huawei’s Ascend 910B, the people said. Huawei is restricted from buying the technology to protect U.S. national security. Reuters could not determine how the chip ended up on the Huawei product.
TSMC to prove that it was not related to Huawei.
Sophgo said in a statement on its website on Sunday that it was in compliance with all laws and had never engaged in any business relationship with Huawei. Sophgo, which is affiliated with cryptocurrency mining equipment company Bitmain, said it had provided a detailed investigation report to TSMC to prove that it was not related to Huawei.
TSMC declined to comment. Huawei
did not immediately respond to a request for comment. The U.S. Department of Commerce said it was aware of reports of potential violations of U.S. export controls but it could not comment on whether any investigation was ongoing.
TSMC U.S
Tech research firm TechInsights discovered the TSMC chip on Huawei’s Ascend 910B when it took apart the multi-chip processor, a different source told Reuters on Tuesday. Alerted to the finding, about two weeks ago TSMC notified the U.S., the source said.
TSMC alerted Taiwan and U.S. authorities, and began a detailed investigation, the official said. But the official did not name the client, which the latest sources identified as Sophgo.
The Information tech news outlet also reported the name on Saturday.TSMC, the world’s largest contract chipmaker, said earlier this week it had not supplied Huawei since mid-September 2020, and that it “proactively communicated” with the Commerce Department regarding the matter
Shenzhen-based Huawei said in a statement.
on Tuesday it has not produced any chips via TSMC after the U.S. imposed new export rules on the company in 2020.In 2020, the U.S. expanded its authority to stop shipments of foreign-produced items to Huawei that are the direct product of U.S.
technology or software, including TSMC’s chips.Before then, TSMC supplied chips for Huawei’s Ascend series, sources told Reuters earlier this year. Its Ascend 910B, released in 2022, is viewed as the most advanced AI chip available from a Chinese company.
In August, the Research Institute for Democracy, Society and Emerging Technology (DSET) in Taiwan reported that Bitmain, which it described as a leading Chinese integrated circuit design enterprise and supplier of cryptocurrency mining machines, was “aiming to challenge the AI chip market dominance of Nvidia and AMD.”
The DSET report described Sophgo as a Bitmain affiliate. Sophgo was co-founded by Micree Zhan, who also co-founded Bitmain, according to a corporate registration database.
The company also communicated
The company also communicated with the U.S. Federal Communications Commission in 2023 using a Bitmain email address and the name Xiamen Sophgo Technologies Ltd.
In a related development, it has been revealed that the company in question, Xiamen Sophgo Technologies Ltd., used a Bitmain email address while communicating with the U.S. Federal Communications Commission (FCC) in 2023.
This unusual detail has raised suspicions and led to further investigations into the links between Bitmain, a major Chinese manufacturer of cryptocurrency mining hardware, and other Chinese tech firms like Huawei and Sophgo.
The Connection: Bitmain and Xiamen Sophgo Technologies Ltd.
Bitmain is well-known for its dominance in the cryptocurrency mining sector, especially for producing Application-Specific Integrated Circuit (ASIC) chips, which are critical for high-performance computing in mining Bitcoin and other cryptocurrencies. However, the use of a Bitmain-associated email in the communication with the FCC by Xiamen Sophgo Technologies has raised eyebrows.
Sophgo is a relatively lesser-known Chinese semiconductor firm that is believed to have connections with both Huawei and Bitmain. The use of a Bitmain email address suggests that there might be deeper operational or business relationships between these companies, which could involve the sharing of technology or intellectual property.
Investigative Scrutiny: U.S. Export Controls
This revelation adds a new layer of complexity to ongoing investigations surrounding the use of U.S. technologies by Chinese firms. Xiamen Sophgo has been under scrutiny for its potential role in circumventing U.S. export controls by supplying chips or technology to Huawei.
The FCC’s involvement and the use of a Bitmain email raise questions about whether these companies are cooperating to develop advanced technologies despite restrictions.
The communication with the FCC was likely part of regulatory filings, but the unusual choice of email domain has led investigators to delve deeper into whether these companies are working together to bypass U.S. sanctions, particularly in the field of semiconductor production.
The U.S. has long been concerned about Chinese firms’ access to advanced chipmaking technologies, and this incident could point to new methods being used by companies like Huawei to secure cutting-edge components for their devices.
Implications for Huawei and U.S. Regulatory Bodies
Huawei has been at the center of U.S. export restrictions and technology transfer scrutiny for several years, especially after the Entity List designation by the U.S. Department of Commerce in 2019. The Entity List bars U.S. companies from selling technology to Huawei without a special license.
If Bitmain, Sophgo, or other associated companies are found to be involved in facilitating Huawei’s access to advanced technology, the repercussions could be significant. The U.S. government, including bodies like the FCC, could impose tighter restrictions not only on Huawei but also on affiliated firms, expanding the scope of sanctions.
The discovery of the Bitmain email raises concerns that Chinese tech companies may be forming alliances to skirt around U.S. trade restrictions, particularly in areas like semiconductor manufacturing, where companies like TSMC have already suspended shipments to firms suspected of supplying Huawei indirectly.
Global Repercussions and Supply Chain Concerns
This development also reflects the growing complexity of the global supply chain in the tech industry. Firms like Xiamen Sophgo are lesser-known players but may be pivotal in China’s effort to develop its own semiconductor capabilities.
These companies are often involved in producing crucial components that, if intertwined with larger firms like Bitmain or Huawei, could further complicate efforts by the U.S. to regulate the flow of advanced technologies to China.
The ongoing investigations could lead to even more stringent export controls and sanctions against companies involved in potential regulatory violations. For the global tech sector, this means increased supply chain disruptions, as many companies rely on the same chipmakers and suppliers like TSMC for their products. Any further restrictions on Chinese companies would likely affect global production and lead to supply shortages.
Conclusion
The use of a Bitmain email address by Xiamen Sophgo Technologies Ltd. in communication with the FCC adds another layer to the complex web of Chinese companies involved in high-tech industries.
As regulatory bodies like the FCC and U.S. Commerce Department dig deeper, more information may emerge on how Chinese firms are working together to potentially circumvent U.S. sanctions and secure advanced semiconductor technologies.
The outcome of these investigations will likely have significant implications for global tech supply chains, U.S.-China trade relations, and the future of semiconductor development.
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