US SANCTIONS:
The Taiwanese tech giant ended all shipments to China-based Sophgo Technologies after one of its chips was discovered in a Huawei phone.

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) suspended shipments to China-based chip designer Sophgo Technologies Ltd (算能科技) after a chip it made was found in a Huawei artificial intelligence (AI) processor Technologies Co (華為), according to two people familiar with the matter.

Sophgo had ordered chips from TSMC that matched the one found in Huawei’s Ascend 910B, the people said. Huawei is prohibited from purchasing technology to protect US national security. Reuters could not determine how the chip ended up in the Huawei product.

Sophgo said in a statement on its website yesterday that it complied with all laws and had never entered into any business relationship with Huawei. Sophgo, which is affiliated with cryptocurrency mining equipment company Bitmain Technologies Ltd (比特大陸), said it had provided a detailed investigation report to TSMC to prove it was not related to Huawei.

Photo: CNA

TSMC declined to comment. Huawei did not immediately respond to a request for comment. The U.S. Commerce Department said it was aware of reports of possible violations of U.S. export controls but could not comment on whether any investigation was ongoing.

Technology research firm TechInsights discovered the TSMC chip in Huawei’s Ascend 910B when it disassembled the multi-chip processor, a different source told Reuters on Tuesday last week.

After being alerted to the finding, TSMC notified the US about two weeks ago, the source said.

Around the same time, TSMC also stopped shipments to a customer, Reuters reported on Wednesday, citing a Taiwanese official who said the suspension came after the company discovered that a chip it supplied to the customer ended up in a Huawei product. .

TSMC alerted Taiwanese and US authorities and began a detailed investigation, the official said. However, the official did not name the client, who the latest sources identified as Sophgo. The information technology news outlet also reported the name on Saturday.

In August, Taiwan’s Research Institute for Democracy, Society and Emergency Technology (DSET) reported that Bitmain, which it described as a leading Chinese integrated circuit design and cryptocurrency mining machine supplier, was intended to “challenge the dominance of the AI ​​chip market.” from Nvidia Corp and Advanced Micro Devices Inc.”

The DSET report described Sophgo as a subsidiary of Bitmain. Sophgo was co-founded by Micree Zhan (詹克團), who also co-founded Bitmain, according to a corporate registration database.

The company also contacted the US Federal Communications Commission last year using a Bitmain email address and the name Xiamen Sophgo Technologies Ltd.

In 2021, prosecutors raided Bitmain’s operations in Taiwan and charged two Bitmain affiliates with illegally recruiting Taiwanese semiconductor engineers and illegally conducting research and development activities, the New Taipei City Prosecutor’s Office said in a statement.

Four Taiwanese defendants pleaded guilty and received fines, he said.

Sophgo’s website says it has research and development centers in more than 10 cities in China and other countries.