Chinese firm whose chip was found in Huawei’s AI processor is about to be punished by the U.S.

Just about one month before the Biden administration comes to an end one of its parting acts will be to blacklist a fabless Chinese chip maker named Sophgo. The latter designed a chip that was manufactured by TSMC, the world’s largest foundry, and this TSMC chip was found inside a Huawei artificial intelligence processor, the Ascend 910B multi-chip system. 

Sophgo is an affiliate of bitcoin mining equipment supplier Bitmain and is about to get the same punishment that Huawei got back in 2019 from the U.S. Commerce Department. That is having its name listed on the Entity List. Those companies on the list cannot access their U.S. suppliers unless these suppliers receive a license from the Commerce Department. Huawei’s placement on the list led it to create its own HarmonyOS operating system since it was no longer allowed to use the Google Mobile Services version of Android.

The following year, an export rule change made by the Commerce Department no longer allowed foundries using American technology to ship cutting-edge semiconductors to Huawei. The goal was to keep 5G chips away from Huawei and away from China’s military. That worked from 2021 to the summer of 2023 when Huawei announced the Mate 60 Pro. The flagship phone was powered by a new Huawei 5G chipset made by China’s SMIC using its 7nm node. For the first time since the Mate 40 line, the Mate 60 series gave Huawei a high-end phone to sell that supported 5G.

The TSMC built chip was discovered by TechInsights when it took apart the Ascend 910B. Once the chip was found in the Huawei AI processor, TechInsights notified TSMC. The foundry told the U.S. Commerce Department and after it matched the chip to Sophgo’s design, the Taiwan-based chip manufacturer suspended shipments to Sophgo. U.S. authorities are currently investigating the matter.

Huawei’s Ascend 910B, launched in 2022, is considered the most advanced AI chip available from a Chinese company. The Huawei Ascend 910C follow-up will be mass produced starting early next year. That chip is designed to compete with NVIDIA’s top AI silicon. On November 11th the U.S. ordered TSMC not to ship to China advanced chips made using the 7nm or higher process node. Huawei says that it has not had any chips built by TSMC since the new U.S. export rules went into effect in 2020.

Sophgo said back in October that it “has never been engaged in any direct or indirect business relationship with Huawei.” More typically, Sophgo does business with local governments and state-owned firms with China Telecom mentioned as one example. Over the last two years, the Sophgo and Bitmain AI chips were purchased by State-run universities in China building AI tools and by police stations looking to improve their surveillance operations.