TSMC Halts Chip Shipments to China's Sophgo Amid Investigation
The world's largest contract chip manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC), has suspended shipments to China-based chip designer Sophgo. This decision follows the discovery of a TSMC-produced chip in Huawei's artificial intelligence processor, raising concerns over potential violations of U.S. export controls aimed at protecting national security.
According to sources familiar with the situation, the halted shipments relate to a chip matching one found in Huawei's Ascend 910B. The U.S. has imposed restrictions limiting Huawei's ability to acquire certain technologies, including those manufactured by TSMC.
The issue came to light after the technology research firm TechInsights identified a TSMC chip in a Huawei processor. TSMC became aware of these findings about two weeks ago and subsequently informed U.S. officials, initiating a detailed investigation into the matter.
Earlier this week, TSMC stated that it has not supplied chips to Huawei since mid-September 2020 and that it has been in proactive communication with the U.S. Department of Commerce regarding the current situation. The company also confirmed that it is not currently subject to any investigation.
Huawei claimed that it has not produced any chips through TSMC since the U.S. implemented new export rules in 2020, which expanded the government's authority to block shipments of foreign-made products that are direct products of U.S. technology or software.
Sophgo, described as a subsidiary of cryptocurrency mining equipment company Bitmain, did not respond to requests for comment. Bitmain is recognized as a significant player in integrated circuit design and a supplier of cryptocurrency mining machines, and it is reportedly challenging the artificial intelligence chip market dominated by industry giants like Nvidia and AMD.
Bitmain's co-founder Micree Zhan is also listed as a co-founder of Sophgo. The company has communicated with the Federal Communications Commission using a Bitmain email address under the name Xiamen Sophgo Technologies Ltd.
In a related development, Bitmain faced legal challenges in Taiwan in 2021, where prosecutors raided the company's operations and accused it of illegal activities, including the unlawful hiring of Taiwanese semiconductor engineers and unauthorized R&D. Four Taiwanese defendants pleaded guilty and were fined in connection with these charges.
Sophgo's website claims to have research and development centers spread across over ten cities in China and other countries. As TSMC and U.S. officials continue their investigations into the unauthorized use of TSMC chips in Huawei products, the situation remains under review.