TSMC suspended shipments to China firm after chip found on Huawei processor, sources say By Reuters

(This Oct. 26 story has been refiled to repair the title of the Analysis Institute for Democracy, Society and Rising Expertise in paragraph 13)

By Karen Freifeld and Fanny Potkin

(Reuters) – Taiwan Semiconductor Manufacturing Firm suspended shipments to China-based chip designer Sophgo after a chip it made was discovered on a Huawei AI processor, based on two individuals conversant in the matter.

Sophgo had ordered chips from TSMC that matched the one discovered on Huawei’s Ascend 910B, the individuals stated. Huawei is restricted from shopping for the expertise to guard U.S. nationwide safety. Reuters couldn’t decide how the chip ended up on the Huawei product.

Sophgo stated in a press release on its web site on Sunday that it was in compliance with all legal guidelines and had by no means engaged in any enterprise relationship with Huawei. Sophgo, which is affiliated with cryptocurrency mining tools firm Bitmain, stated it had supplied an in depth investigation report back to TSMC to show that it was not associated to Huawei.

TSMC declined to remark. Huawei didn’t instantly reply to a request for remark. The U.S. Division of Commerce stated it was conscious of experiences of potential violations of U.S. export controls nevertheless it couldn’t touch upon whether or not any investigation was ongoing.

Tech analysis agency TechInsights found the TSMC chip on Huawei’s Ascend 910B when it took aside the multi-chip processor, a unique supply instructed Reuters on Tuesday. Alerted to the discovering, about two weeks in the past TSMC notified the U.S., the supply stated.

About the identical time, TSMC additionally halted shipments to a consumer, Reuters reported on Wednesday, citing a Taiwan official who stated the suspension got here after the corporate found a chip it provided to the consumer ended up in a Huawei product. 

TSMC alerted Taiwan and U.S. authorities, and commenced an in depth investigation, the official stated. However the official didn’t title the consumer, which the most recent sources recognized as Sophgo. The Data tech information outlet additionally reported the title on Saturday.

TSMC, the world’s largest contract chipmaker, stated earlier this week it had not provided Huawei since mid-September 2020, and that it “proactively communicated” with the Commerce Division relating to the matter. 

“We aren’t conscious of TSMC being the topic of any investigation at the moment,” the corporate assertion stated.

Shenzhen-based Huawei stated in a press release on Tuesday it has not produced any chips through TSMC after the U.S. imposed new export guidelines on the corporate in 2020.  

In 2020, the U.S. expanded its authority to cease shipments of foreign-produced gadgets to Huawei which are the direct product of U.S. expertise or software program, together with TSMC’s chips. 

Earlier than then, TSMC provided chips for Huawei’s Ascend collection, sources instructed Reuters earlier this 12 months. Its Ascend 910B, launched in 2022, is seen as essentially the most superior AI chip out there from a Chinese language firm.

In August, the Analysis Institute for Democracy, Society and Rising Expertise (DSET) in Taiwan reported that Bitmain, which it described as a number one Chinese language built-in circuit design enterprise and provider of cryptocurrency mining machines, was “aiming to problem the AI chip market dominance of Nvidia (NASDAQ:) and AMD (NASDAQ:).”

The DSET report described Sophgo as a Bitmain affiliate.

Sophgo was co-founded by Micree Zhan, who additionally co-founded Bitmain, based on a company registration database.

The corporate additionally communicated with the U.S. Federal Communications Fee in 2023 utilizing a Bitmain e mail handle and the title Xiamen Sophgo Applied sciences Ltd.

In 2021, prosecutors raided Bitmain’s operations in Taiwan and accused two Bitmain associates of illegally recruiting Taiwanese semiconductor engineers and illegally conducting analysis and improvement actions, based on a press release by the New Taipei prosecutors workplace.

4 Taiwanese defendants pleaded responsible and got fines, based on the assertion.  

Sophgo’s web site says it has analysis and improvement facilities in additional than 10 cities in China and different nations.