The U.S. government is preparing to blacklist Sophgo, a Chinese semiconductor company accused of indirectly supplying Taiwan Semiconductor Manufacturing Company (TSMC)-made chips to Huawei, a source familiar with the matter revealed. The decision comes as part of ongoing efforts to curtail Huawei’s AI-chip development amidst U.S. national security concerns.
Sophgo reportedly ordered a chip from TSMC that was later discovered in Huawei’s Ascend 910B processor. Tech research firm TechInsights identified the chip and informed TSMC, which subsequently alerted U.S. authorities. TSMC, the world’s largest contract chipmaker, ceased shipments to Sophgo following the discovery. The U.S. Commerce Department has yet to confirm details about the blacklist.
Blacklist’s Implications for Sophgo
Sophgo, an affiliate of bitcoin mining equipment maker Bitmain, denies any direct or indirect relationship with Huawei. Despite this, the company is set to join the U.S. Commerce Department’s Entity List, a designation that restricts companies from accessing U.S.-origin goods and technology without a license. These licenses are generally denied when national security or foreign policy risks are identified.
The move follows a series of U.S. actions aimed at disrupting what officials describe as Huawei’s shadow network. Huawei itself was added to the Entity List in 2019 and has since faced increasing export controls, including prohibitions on receiving foreign-made chips without U.S. approval.
Huawei’s Role in China’s AI Ambitions
Once constrained by U.S. trade restrictions, Huawei has diversified its supply chain and remains pivotal to China’s ambitions in AI-chip development. Released in 2022, the Ascend 910B is regarded as the most advanced AI chip from a Chinese company. Huawei has also announced plans to mass-produce the Ascend 910C by 2025, aiming to rival AI chip leaders like Nvidia.
Supply Chain Controversy
Sophgo’s chips have been purchased by Chinese state-run entities, universities, and local governments for applications ranging from AI tool development to enhanced surveillance systems. Despite the controversy, Sophgo and its parent company, Bitmain, have distanced themselves from the investigation, with Bitmain stating it is unrelated to the supply chain probe.
The situation underscores the growing geopolitical tensions surrounding advanced chip technologies and their role in AI and national security. Taiwan, a key player in the global semiconductor supply chain, has been closely coordinating with U.S. authorities during the investigation.
Industry Reaction
Neither the U.S. Commerce Department nor TSMC has commented on the ongoing investigation. However, TSMC confirmed earlier this year that it has not supplied Huawei since 2020. The blacklist, if implemented, would further restrict Sophgo’s access to vital semiconductor technologies, potentially hampering its operations and China’s AI development goals.
Author’s Opinion
The blacklisting of Sophgo highlights the escalating tech tensions between the U.S. and China, with semiconductors at the center of the conflict. While the U.S. seeks to protect its national security, these measures risk deepening global supply chain disruptions and fueling technological decoupling. Striking a balance between safeguarding security and maintaining global cooperation will be critical in navigating the future of AI and semiconductor advancements.
Featured image courtesy of Nikkei Asia
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