TSMC Suspends Shipments to Chinese Firm After Chip Found in Huawei AI Processor

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

This undated picture shows a Taiwan Semiconductor Manufacturing Company (TSMC) logo in Taiwan. AFP-Yonhap Taiwan Semiconductor Manufacturing Company suspended shipments to China-based chip designer Sophgo after a chip it made was found on a Huawei AI processor, according to two people familiar with the matter. Sophgo had ordered chips from TSMC that matched the one found on Huawei's Ascend 910B, the people said. Huawei is restricted from buying the technology to protect U.S. national security. Reuters could not determine how the chip ended up on the Huawei product. Sophgo, which is affiliated with cryptocurrency mining equipment company Bitmain, did not respond to requests for comment. TSMC declined comment. Huawei did not immediately respond to a request for comment. The U.S. Department of Commerce said it was aware of reports of potential violations of U.S. export controls but could not comment on whether any investigation is ongoing. Tech research firm TechInsights discovered the TSMC chip on Huawei's Ascend 910B when it took apart the multi-chip processor, a different source told Reuters on Tuesday. Alerted to the finding, about two weeks ago TSMC notified the U.S., the source said. About the same time, TSMC also halted shipments to a client, Reuters reported on Wednesday, citing a Taiwan official who said the suspension came after the company discovered a chip it supplied to the client ended up in a Huawei product. TSMC alerted Taiwan and U.S. authorities, and began a detailed investigation, the official said. But the official did not name the client, which the latest sources have identified as Sophgo. The Information tech news outlet also reported the name earlier on Saturday. TSMC, the world's largest contract chipmaker, said earlier this week it had not supplied Huawei since mid-September 2020, and that it "proactively communicated" with the Commerce Department regarding the matter. "We are not aware of TSMC being the subject of any investigation at this time," the company statement said. Shenzhen-based Huawei said in a statement on Tuesday it has not produced any chips via TSMC after the U.S. imposed new export rules on the company in 2020. In 2020, the U.S. expanded its authority to stop shipments of foreign-produced items to Huawei that are the direct product of U.S. technology or software, including TSMC's chips. Before then, TSMC supplied chips for Huawei's Ascend series, sources told Reuters earlier this year. Its Ascend 910B, released in 2022, is viewed as the most advanced AI chip available from a Chinese company. In August, the Research Institute for Democracy, Society and Emergency Technology (DSET) in Taiwan reported that Bitmain, which it described as a leading Chinese integrated circuit (IC) design enterprise and supplier of cryptocurrency mining machines, was "aiming to challenge the AI chip market dominance of Nvidia and AMD." The DSET report described Sophgo as a Bitmain affiliate. Sophgo was co-founded by Micree Zhan, who also co-founded Bitmain, according to a corporate registration database. The company also communicated with the Federal Communications Commission in 2023 using a Bitmain email address and the name Xiamen Sophgo Technologies Ltd. In 2021, prosecutors raided Bitmain's operations in Taiwan and accused two Bitmain affiliates of illegally recruiting Taiwanese semiconductor engineers and illegally conducting R&D, according to a statement by the New Taipei prosecutors office. Four Taiwanese defendants pleaded guilty and were given fines, according to the statement. Sophgo's website says it has R&D centers in more than 10 cities in China and other countries. (Reuters)

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

This undated picture shows a Taiwan Semiconductor Manufacturing Company (TSMC) logo in Taiwan. AFP-Yonhap Taiwan Semiconductor Manufacturing Company suspended shipments to China-based chip designer Sophgo after a chip it made was found on a Huawei AI processor, according to two people familiar with the matter. Sophgo had ordered chips from TSMC that matched the one found on Huawei's Ascend 910B, the people said. Huawei is restricted from buying the technology to protect U.S. national security. Reuters could not determine how the chip ended up on the Huawei product. Sophgo, which is affiliated with cryptocurrency mining equipment company Bitmain, did not respond to requests for comment. TSMC declined comment. Huawei did not immediately respond to a request for comment. The U.S. Department of Commerce said it was aware of reports of potential violations of U.S. export controls but could not comment on whether any investigation is ongoing. Tech research firm TechInsights discovered the TSMC chip on Huawei's Ascend 910B when it took apart the multi-chip processor, a different source told Reuters on Tuesday. Alerted to the finding, about two weeks ago TSMC notified the U.S., the source said. About the same time, TSMC also halted shipments to a client, Reuters reported on Wednesday, citing a Taiwan official who said the suspension came after the company discovered a chip it supplied to the client ended up in a Huawei product. TSMC alerted Taiwan and U.S. authorities, and began a detailed investigation, the official said. But the official did not name the client, which the latest sources have identified as Sophgo. The Information tech news outlet also reported the name earlier on Saturday. TSMC, the world's largest contract chipmaker, said earlier this week it had not supplied Huawei since mid-September 2020, and that it "proactively communicated" with the Commerce Department regarding the matter. "We are not aware of TSMC being the subject of any investigation at this time," the company statement said. Shenzhen-based Huawei said in a statement on Tuesday it has not produced any chips via TSMC after the U.S. imposed new export rules on the company in 2020. In 2020, the U.S. expanded its authority to stop shipments of foreign-produced items to Huawei that are the direct product of U.S. technology or software, including TSMC's chips. Before then, TSMC supplied chips for Huawei's Ascend series, sources told Reuters earlier this year. Its Ascend 910B, released in 2022, is viewed as the most advanced AI chip available from a Chinese company. In August, the Research Institute for Democracy, Society and Emergency Technology (DSET) in Taiwan reported that Bitmain, which it described as a leading Chinese integrated circuit (IC) design enterprise and supplier of cryptocurrency mining machines, was "aiming to challenge the AI chip market dominance of Nvidia and AMD." The DSET report described Sophgo as a Bitmain affiliate. Sophgo was co-founded by Micree Zhan, who also co-founded Bitmain, according to a corporate registration database. The company also communicated with the Federal Communications Commission in 2023 using a Bitmain email address and the name Xiamen Sophgo Technologies Ltd. In 2021, prosecutors raided Bitmain's operations in Taiwan and accused two Bitmain affiliates of illegally recruiting Taiwanese semiconductor engineers and illegally conducting R&D, according to a statement by the New Taipei prosecutors office. Four Taiwanese defendants pleaded guilty and were given fines, according to the statement. Sophgo's website says it has R&D centers in more than 10 cities in China and other countries. (Reuters)

TSMC tech in Huawei's AI chips raises questions about 'porous' supply chain

The Huawei logo is seen at its booth during the Mobile World Congress in Shanghai, China, June 28, 2023. Reuters-Yonhap When a Canadian research firm found that Huawei Technologies' multi-chiplet artificial intelligence (AI) processor Ascend 910B contained dies made by Taiwan Semiconductor Manufacturing Company (TSMC), it shed light on possible loopholes in U.S. sanctions and China's persistent efforts to access advanced foundry technologies, according to analysts. "U.S. long-arm sanctions on China's semiconductor sector have proven to be porous," said Arisa Liu, a research fellow and director at the Taiwan Institute of Economic Research. The discovery has caused a scramble to find explanations for what happened. TSMC has since halted shipments to an unnamed customer after discovering one of its chips supplied to the client ended up in a Huawei product, Reuters reported on Wednesday. The chipmaker also notified the U.S. government and Taiwanese authorities about the incident, a possible breach of U.S. export controls, according to Taiwan official media. In a previous statement, TSMC said it has not supplied Huawei since September 2020. Huawei said it has not "produced any chips via TSMC after the implementation of the amendments made by the US Department of Commerce to its [foreign direct product rule] that targeted Huawei in 2020." For now, there are more questions than answers. The duration, size and scope of the suspected customer's cooperation with TSMC remain unknown. The customer's relationship with Huawei, or whether it has any relationship with the Chinese telecoms equipment maker at all, is also unknown. It is not certain whether the TSMC dies found by TechInsights made their way into Huawei hardware via the same customer. Whether Huawei had access to TSMC's advanced foundry capacity directly or through indirect proxies, it is a sign that the strict U.S. semiconductor restrictions targeting the Chinese national champion are compromised, analysts say. The logo of Taiwan Semiconductor Manufacturing Company (TSMC) is pictured at its headquarters in Hsinchu, Taiwan, Jan. 19, 2021. Reuters-Yonhap The TechInsights finding has largely gone unreported in official Chinese media, although several social media accounts translated and cited foreign media reports. As Huawei's Ascend chips have risen to become China's premier AI-focused semiconductors, they are now at the heart of the country's self-sufficiency drive. As of this year, the Ascend ecosystem has 40 hardware partners, 1,600 software partners and 2,900 AI application solutions, according to Huawei. Huawei first released the Ascend 910 chip in 2019, four months after the company was added to a U.S. trade blacklist, and it has since kept its capabilities close to its chest. The company never officially released the 910B. Instead, the product just appeared unannounced on the mainland in 2023, quickly becoming the most popular alternative to Nvidia products. A Huawei executive said at a forum in June this year that the 910B chip is on par with Nvidia's A100 -- one of the most popular graphics processing units in the AI industry. There is "not much difference" in computing power performance between the 910B and Nvidia A100 when it comes to training large AI models, Wang Tao, chief operating officer of Jiangsu Kunpeng Ecosystem Innovation Center, said at the time. But key information about 910B, including its output scale and manufacturers, remains undisclosed. An industry source told the Post earlier that Huawei has started to send its third-generation 910C chip to a limited group of major customers for testing and configuration. Industry insiders said the incident implies that China still faces difficulty in advanced chip-making, and it remains extremely hard for China to make progress in the sector without foreign technologies or tools such as extreme ultraviolet lithography machines from Dutch supplier ASML. Huawei surprised the market last year with a smartphone powered by a 7-nanometer chip, which a TechInsights teardown report later found was manufactured by Semiconductor Manufacturing International Corporation. The Mate 60 Pro marked Huawei's return to the 5G handset market, and patriotic fervour spurred sales of the device and the following flagship, the Pura 70. Read the full story at SCMP.

TSMC tech in Huawei's AI chips raises questions about 'porous' supply chain

The Huawei logo is seen at its booth during the Mobile World Congress in Shanghai, China, June 28, 2023. Reuters-Yonhap When a Canadian research firm found that Huawei Technologies' multi-chiplet artificial intelligence (AI) processor Ascend 910B contained dies made by Taiwan Semiconductor Manufacturing Company (TSMC), it shed light on possible loopholes in U.S. sanctions and China's persistent efforts to access advanced foundry technologies, according to analysts. "U.S. long-arm sanctions on China's semiconductor sector have proven to be porous," said Arisa Liu, a research fellow and director at the Taiwan Institute of Economic Research. The discovery has caused a scramble to find explanations for what happened. TSMC has since halted shipments to an unnamed customer after discovering one of its chips supplied to the client ended up in a Huawei product, Reuters reported on Wednesday. The chipmaker also notified the U.S. government and Taiwanese authorities about the incident, a possible breach of U.S. export controls, according to Taiwan official media. In a previous statement, TSMC said it has not supplied Huawei since September 2020. Huawei said it has not "produced any chips via TSMC after the implementation of the amendments made by the US Department of Commerce to its [foreign direct product rule] that targeted Huawei in 2020." For now, there are more questions than answers. The duration, size and scope of the suspected customer's cooperation with TSMC remain unknown. The customer's relationship with Huawei, or whether it has any relationship with the Chinese telecoms equipment maker at all, is also unknown. It is not certain whether the TSMC dies found by TechInsights made their way into Huawei hardware via the same customer. Whether Huawei had access to TSMC's advanced foundry capacity directly or through indirect proxies, it is a sign that the strict U.S. semiconductor restrictions targeting the Chinese national champion are compromised, analysts say. The logo of Taiwan Semiconductor Manufacturing Company (TSMC) is pictured at its headquarters in Hsinchu, Taiwan, Jan. 19, 2021. Reuters-Yonhap The TechInsights finding has largely gone unreported in official Chinese media, although several social media accounts translated and cited foreign media reports. As Huawei's Ascend chips have risen to become China's premier AI-focused semiconductors, they are now at the heart of the country's self-sufficiency drive. As of this year, the Ascend ecosystem has 40 hardware partners, 1,600 software partners and 2,900 AI application solutions, according to Huawei. Huawei first released the Ascend 910 chip in 2019, four months after the company was added to a U.S. trade blacklist, and it has since kept its capabilities close to its chest. The company never officially released the 910B. Instead, the product just appeared unannounced on the mainland in 2023, quickly becoming the most popular alternative to Nvidia products. A Huawei executive said at a forum in June this year that the 910B chip is on par with Nvidia's A100 -- one of the most popular graphics processing units in the AI industry. There is "not much difference" in computing power performance between the 910B and Nvidia A100 when it comes to training large AI models, Wang Tao, chief operating officer of Jiangsu Kunpeng Ecosystem Innovation Center, said at the time. But key information about 910B, including its output scale and manufacturers, remains undisclosed. An industry source told the Post earlier that Huawei has started to send its third-generation 910C chip to a limited group of major customers for testing and configuration. Industry insiders said the incident implies that China still faces difficulty in advanced chip-making, and it remains extremely hard for China to make progress in the sector without foreign technologies or tools such as extreme ultraviolet lithography machines from Dutch supplier ASML. Huawei surprised the market last year with a smartphone powered by a 7-nanometer chip, which a TechInsights teardown report later found was manufactured by Semiconductor Manufacturing International Corporation. The Mate 60 Pro marked Huawei's return to the 5G handset market, and patriotic fervour spurred sales of the device and the following flagship, the Pura 70. Read the full story at SCMP.

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

This move comes amid ongoing U.S. restrictions on Huawei, which is prohibited from accessing U.S. technology. TSMC, as a major supplier to Huawei, is under scrutiny to ensure compliance with these restrictions. Taiwan Semiconductor Manufacturing Company suspended shipments to China-based chip designer Sophgo after a chip it made was found on a Huawei AI processor, according to two people familiar with the matter. Sophgo had ordered chips from TSMC that matched the one found on Huawei's Ascend 910B, the people said. Huawei is restricted from buying the technology to protect U.S. national security. Reuters could not determine how the chip ended up on the Huawei product. Sophgo, which is affiliated with cryptocurrency mining equipment company Bitmain, did not respond to requests for comment. TSMC declined comment. Huawei did not immediately respond to a request for comment. The U.S. Department of Commerce said it was aware of reports of potential violations of U.S. export controls but could not comment on whether any investigation is ongoing. Tech research firm TechInsights discovered the TSMC chip on Huawei's Ascend 910B when it took apart the multi-chip processor, a different source told Reuters on Tuesday. Alerted to the finding, about two weeks ago TSMC notified the U.S., the source said. About the same time, TSMC also halted shipments to a client, Reuters reported on Wednesday, citing a Taiwan official who said the suspension came after the company discovered a chip it supplied to the client ended up in a Huawei product. TSMC alerted Taiwan and U.S. authorities, and began a detailed investigation, the official said. But the official did not name the client, which the latest sources have identified as Sophgo. The Information tech news outlet also reported the name earlier on Saturday. TSMC, the world's largest contract chipmaker, said earlier this week it had not supplied Huawei since mid-September 2020, and that it "proactively communicated" with the Commerce Department regarding the matter. "We are not aware of TSMC being the subject of any investigation at this time," the company statement said. Shenzhen-based Huawei said in a statement on Tuesday it has not produced any chips via TSMC after the U.S. imposed new export rules on the company in 2020. In 2020, the U.S. expanded its authority to stop shipments of foreign-produced items to Huawei that are the direct product of U.S. technology or software, including TSMC's chips. Before then, TSMC supplied chips for Huawei's Ascend series, sources told Reuters earlier this year. Its Ascend 910B, released in 2022, is viewed as the most advanced AI chip available from a Chinese company. In August, the Research Institute for Democracy, Society and Emergency Technology (DSET) in Taiwan reported that Bitmain, which it described as a leading Chinese integrated circuit (IC) design enterprise and supplier of cryptocurrency mining machines, was "aiming to challenge the AI chip market dominance of Nvidia and AMD." The DSET report described Sophgo as a Bitmain affiliate. Sophgo was co-founded by Micree Zhan, who also co-founded Bitmain, according to a corporate registration database. The company also communicated with the Federal Communications Commission in 2023 using a Bitmain email address and the name Xiamen Sophgo Technologies Ltd. In 2021, prosecutors raided Bitmain's operations in Taiwan and accused two Bitmain affiliates of illegally recruiting Taiwanese semiconductor engineers and illegally conducting R&D, according to a statement by the New Taipei prosecutors office. Four Taiwanese defendants pleaded guilty and were given fines, according to the statement. Sophgo's website says it has R&D centers in more than 10 cities in China and other countries.

TSMC Suspended Shipments to China Firm After Chip Found on Huawei Processor, Sources Say

(Reuters) - Taiwan Semiconductor Manufacturing Company suspended shipments to China-based chip designer Sophgo after a chip it made was found on a Huawei AI processor, according to two people familiar with the matter. Sophgo had ordered chips from TSMC that matched the one found on Huawei's Ascend 910B, the people said. Huawei is restricted from buying the technology to protect U.S. national security. Reuters could not determine how the chip ended up on the Huawei product. Sophgo, which is affiliated with cryptocurrency mining equipment company Bitmain, did not respond to requests for comment. TSMC declined comment. Huawei did not immediately respond to a request for comment. The U.S. Department of Commerce said it was aware of reports of potential violations of U.S. export controls but could not comment on whether any investigation is ongoing. Tech research firm TechInsights discovered the TSMC chip on Huawei's Ascend 910B when it took apart the multi-chip processor, a different source told Reuters on Tuesday. Alerted to the finding, about two weeks ago TSMC notified the U.S., the source said. About the same time, TSMC also halted shipments to a client, Reuters reported on Wednesday, citing a Taiwan official who said the suspension came after the company discovered a chip it supplied to the client ended up in a Huawei product. TSMC alerted Taiwan and U.S. authorities, and began a detailed investigation, the official said. But the official did not name the client, which the latest sources have identified as Sophgo. The Information tech news outlet also reported the name earlier on Saturday. TSMC, the world's largest contract chipmaker, said earlier this week it had not supplied Huawei since mid-September 2020, and that it "proactively communicated" with the Commerce Department regarding the matter. "We are not aware of TSMC being the subject of any investigation at this time," the company statement said. Shenzhen-based Huawei said in a statement on Tuesday it has not produced any chips via TSMC after the U.S. imposed new export rules on the company in 2020. In 2020, the U.S. expanded its authority to stop shipments of foreign-produced items to Huawei that are the direct product of U.S. technology or software, including TSMC's chips. Before then, TSMC supplied chips for Huawei's Ascend series, sources told Reuters earlier this year. Its Ascend 910B, released in 2022, is viewed as the most advanced AI chip available from a Chinese company. In August, the Research Institute for Democracy, Society and Emergency Technology (DSET) in Taiwan reported that Bitmain, which it described as a leading Chinese integrated circuit (IC) design enterprise and supplier of cryptocurrency mining machines, was "aiming to challenge the AI chip market dominance of Nvidia and AMD." The DSET report described Sophgo as a Bitmain affiliate. Sophgo was co-founded by Micree Zhan, who also co-founded Bitmain, according to a corporate registration database. The company also communicated with the Federal Communications Commission in 2023 using a Bitmain email address and the name Xiamen Sophgo Technologies Ltd. In 2021, prosecutors raided Bitmain's operations in Taiwan and accused two Bitmain affiliates of illegally recruiting Taiwanese semiconductor engineers and illegally conducting R&D, according to a statement by the New Taipei prosecutors office. Four Taiwanese defendants pleaded guilty and were given fines, according to the statement. Sophgo's website says it has R&D centers in more than 10 cities in China and other countries. (Reporting by Karen Freifeld in New York and Fanny Potkin in Singapore; Editing by Chris Sanders and Diane Craft)

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

(Reuters) - Taiwan Semiconductor Manufacturing Company suspended shipments to China-based chip designer Sophgo after a chip it made was found on a Huawei AI processor, according to two people familiar with the matter. Sophgo had ordered chips from TSMC that matched the one found on Huawei's Ascend 910B, the people said. Huawei is restricted from buying the technology to protect U.S. national security. Reuters could not determine how the chip ended up on the Huawei product. Sophgo, which is affiliated with cryptocurrency mining equipment company Bitmain, did not respond to requests for comment. TSMC declined comment. Huawei did not immediately respond to a request for comment. The U.S. Department of Commerce said it was aware of reports of potential violations of U.S. export controls but could not comment on whether any investigation is ongoing. Tech research firm TechInsights discovered the TSMC chip on Huawei's Ascend 910B when it took apart the multi-chip processor, a different source told Reuters on Tuesday. Alerted to the finding, about two weeks ago TSMC notified the U.S., the source said. About the same time, TSMC also halted shipments to a client, Reuters reported on Wednesday, citing a Taiwan official who said the suspension came after the company discovered a chip it supplied to the client ended up in a Huawei product. TSMC alerted Taiwan and U.S. authorities, and began a detailed investigation, the official said. But the official did not name the client, which the latest sources have identified as Sophgo. The Information tech news outlet also reported the name earlier on Saturday. TSMC, the world's largest contract chipmaker, said earlier this week it had not supplied Huawei since mid-September 2020, and that it "proactively communicated" with the Commerce Department regarding the matter. "We are not aware of TSMC being the subject of any investigation at this time," the company statement said. Shenzhen-based Huawei said in a statement on Tuesday it has not produced any chips via TSMC after the U.S. imposed new export rules on the company in 2020. In 2020, the U.S. expanded its authority to stop shipments of foreign-produced items to Huawei that are the direct product of U.S. technology or software, including TSMC's chips. Before then, TSMC supplied chips for Huawei's Ascend series, sources told Reuters earlier this year. Its Ascend 910B, released in 2022, is viewed as the most advanced AI chip available from a Chinese company. In August, the Research Institute for Democracy, Society and Emergency Technology (DSET) in Taiwan reported that Bitmain, which it described as a leading Chinese integrated circuit (IC) design enterprise and supplier of cryptocurrency mining machines, was "aiming to challenge the AI chip market dominance of Nvidia and AMD." The DSET report described Sophgo as a Bitmain affiliate. Sophgo was co-founded by Micree Zhan, who also co-founded Bitmain, according to a corporate registration database. The company also communicated with the Federal Communications Commission in 2023 using a Bitmain email address and the name Xiamen Sophgo Technologies Ltd. In 2021, prosecutors raided Bitmain's operations in Taiwan and accused two Bitmain affiliates of illegally recruiting Taiwanese semiconductor engineers and illegally conducting R&D, according to a statement by the New Taipei prosecutors office. Four Taiwanese defendants pleaded guilty and were given fines, according to the statement. Sophgo's website says it has R&D centers in more than 10 cities in China and other countries. (Reporting by Karen Freifeld in New York and Fanny Potkin in Singapore; Editing by Chris Sanders and Diane Craft)

TSMC Chips Ended Up in Devices Made by China's Huawei Despite U.S. Controls

Meaghan Tobin, John Liu and Amy Chang Chien reported from Taipei. Ana Swanson reported from Washington. The U.S. government has spent years weaving a web of controls to prevent Chinese companies from being able to buy or make cutting edge computer chips. But several weeks ago, the maker of the world's most advanced chips, Taiwan Semiconductor Manufacturing Company, learned that some of its chips had ended up in devices made by Huawei, a Chinese telecommunications giant under U.S. sanctions, according to two Taiwanese government officials who were not authorized to speak publicly. TSMC, which manufactures chips for tech giants like Apple and Nvidia, said that it had not supplied chips to Huawei since those restrictions went into effect. But TSMC continues to supply other major companies in China, and concerns have been growing among U.S. officials that other companies could be routing products to Huawei. The U.S. government has tried to keep advanced chips out of the hands of Chinese companies over concerns they could be used for military purposes. It has blocked Huawei and other Chinese firms from buying products made with American technology and pushed companies in allied countries including Japan and the Netherlands to stop selling to them. Still, chips used in artificial intelligence are actively traded in markets in China, despite U.S. restrictions, and Chinese companies have continued to develop the kind of technology that the American authorities are concerned about. They have made strides in artificial intelligence systems and the advanced microchips that power them. This progress, along with the presence of TSMC-made chips in Huawei devices, raises questions about how successful the U.S. controls have been at keeping advanced technology out of China, as well as how companies like TSMC vet their customers. The TSMC chips were found in the Ascend 910B, a Huawei processor that contains multiple types of computer chips and is used for training artificial intelligence models, according to an industry analyst and a former U.S. government official familiar with the matter who spoke on condition of anonymity because they were not authorized to speak publicly. It is not clear how the TSMC chips ended up in the Huawei processors, or how many of those processors contained TSMC chips. Chinese companies have gone to great lengths to get around the U.S. restrictions. Many, including Huawei, scrambled to buy American technology before the United States legally shut off sales. Some stockpiled thousands of chips, while others sourced them from a thriving underground marketplace of smugglers. TSMC previously produced the chips for an earlier generation of the Huawei processor. A Huawei spokeswoman said that the company had not asked TSMC to produce any chips for it since the U.S. rule change in 2020. "We did stock up back then," she said. But the two people familiar with the matter said that a Chinese company had recently placed orders with TSMC for hundreds of thousands of chips in a design identical to one in a Huawei product. One of the people said that the Chinese company was Xiamen Sophgo Technologies, and that the orders were placed this year. Sophgo was founded and is partly owned by Micree Zhan, the chief executive of Bitmain, a Chinese company that makes computers used to mine cryptocurrency and processors for A.I. systems. Bitmain is one of TSMC's most significant Chinese customers, said Min-yen Chiang, a nonresident fellow at the Research Institute for Democracy, Society and Emerging Technology, a government-funded think tank in Taipei. Sophgo said in a statement that it had never engaged in any direct or indirect business relationship with Huawei and its business had never been in violation of any U.S. export control laws. The Information first reported that the U.S. government was investigating whether TSMC had made chips for Huawei, and that TSMC had cut off shipments to Sophgo around the time the investigation began. TSMC makes chips that are used to power everything from fighter jets to chatbots. As companies around the world have raced to develop advanced A.I. systems and the competition between the United States and China has intensified, demand for these chips has exploded. U.S. government officials charged with enforcing export controls face a difficult task: writing rules that restrict what private companies do in their operations outside of the United States, according to Jacob Feldgoise, an analyst at the Center for Security and Emerging Technology at Georgetown University, and an author of a report about the capabilities of Huawei's Ascend 910 chips. TSMC said it maintained a robust export system for monitoring and ensuring compliance. "If we have any reason to believe there are potential issues, we will take prompt action to ensure compliance, including conducting investigations and proactively communicating with relevant parties, as we did in this situation," the company said. The U.S. rules allow TSMC to sell some kinds of chips to Chinese companies that are not sanctioned. "These rules don't outright prevent entities like TSMC from making advanced chips for Chinese clients," said Mr. Chiang, the think tank fellow. TSMC and Taiwanese government officials said the company had communicated with the U.S. Department of Commerce. "TSMC discovered about two weeks ago that chips that were shipped a specific customer in the past had ended up in the hands of Huawei for unknown reasons," said one of the Taiwanese officials. TSMC immediately stopped shipments to the company and informed both the U.S. and Taiwan governments, the official said. The U.S. Commerce Department declined to comment. A representative from the Investigations Bureau of Taiwan's Ministry of Justice said it was looking into the reports but had not opened a formal investigation.

TSMC's Shipments to Sophgo Suspended After Chip Found on Huawei Processor

Sophgo is affiliated with cryptocurrency mining equipment company Bitmain Taiwan Semiconductor Manufacturing Company suspended shipments to China-based chip designer Sophgo after a chip it made was found on a Huawei AI processor, according to two people familiar with the matter. Sophgo had ordered chips from TSMC that matched the one found on Huawei's Ascend 910B, the people said. Huawei is restricted from buying the technology to protect U.S. national security. Reuters could not determine how the chip ended up on the Huawei product. Sophgo said in a statement on its website on Sunday that it was in compliance with all laws and had never engaged in any business relationship with Huawei. Sophgo, which is affiliated with cryptocurrency mining equipment company Bitmain, said it had provided a detailed investigation report to TSMC to prove that it was not related to Huawei. TSMC declined to comment. Huawei did not immediately respond to a request for comment. The U.S. Department of Commerce said it was aware of reports of potential violations of U.S. export controls but it could not comment on whether any investigation was ongoing. Tech research firm TechInsights discovered the TSMC chip on Huawei's Ascend 910B when it took apart the multi-chip processor, a different source told Reuters on Tuesday. Alerted to the finding, about two weeks ago TSMC notified the U.S., the source said. About the same time, TSMC also halted shipments to a client, Reuters reported on Wednesday, citing a Taiwan official who said the suspension came after the company discovered a chip it supplied to the client ended up in a Huawei product. TSMC alerted Taiwan and U.S. authorities, and began a detailed investigation, the official said. But the official did not name the client, which the latest sources identified as Sophgo. The Information tech news outlet also reported the name on Saturday. TSMC, the world's largest contract chipmaker, said earlier this week it had not supplied Huawei since mid-September 2020, and that it "proactively communicated" with the Commerce Department regarding the matter. "We are not aware of TSMC being the subject of any investigation at this time," the company statement said. Shenzhen-based Huawei said in a statement on Tuesday it has not produced any chips via TSMC after the U.S. imposed new export rules on the company in 2020. In 2020, the U.S. expanded its authority to stop shipments of foreign-produced items to Huawei that are the direct product of U.S. technology or software, including TSMC's chips. Before then, TSMC supplied chips for Huawei's Ascend series, sources told Reuters earlier this year. Its Ascend 910B, released in 2022, is viewed as the most advanced AI chip available from a Chinese company. In August, the Research Institute for Democracy, Society and Emerging Technology (DSET) in Taiwan reported that Bitmain, which it described as a leading Chinese integrated circuit design enterprise and supplier of cryptocurrency mining machines, was "aiming to challenge the AI chip market dominance of Nvidia and AMD." The DSET report described Sophgo as a Bitmain affiliate. Sophgo was co-founded by Micree Zhan, who also co-founded Bitmain, according to a corporate registration database. The company also communicated with the U.S. Federal Communications Commission in 2023 using a Bitmain email address and the name Xiamen Sophgo Technologies Ltd. In 2021, prosecutors raided Bitmain's operations in Taiwan and accused two Bitmain affiliates of illegally recruiting Taiwanese semiconductor engineers and illegally conducting research and development activities, according to a statement by the New Taipei prosecutors office. Four Taiwanese defendants pleaded guilty and were given fines, according to the statement. Sophgo's website says it has research and development centers in more than 10 cities in China and other countries.

TSMC cuts off Chinese chip designer linked to Huawei

Taiwan Semiconductor Manufacturing Co. has allegedly cut off shipments to Chinese chip designer Sophgo over allegations it was attempting to supply components to Huawei in violation of US sanctions. The report comes roughly a week after TSMC alerted US officials to what they believed was an attempt by Huawei to subvert US export controls on advanced manufacturing technologies and AI accelerators through the use of proxy companies. TSMC raised the alarm after a customer placed orders for a chip closely resembling that of Huawei's Ascend 910B, a high-end AI accelerator aimed at AI training and inference workloads. According to Reuters, which cited two people familiar with the matter, the company in question was Sophgo. Sophgo, which designs chips based on the open RISC-V instruction set architecture, on Sunday issued a statement denying these reports. "The investigation of the US Commerce Department on possible TSMC and Huawei link is not related to Sophgo and its product. Sophgo has never engaged in any direct or indirect business relationship with Huawei," the statement reads. The chip designer claimed it was in full compliance with US export restrictions and had never violated those rules, and had submitted a "detailed investigation report to TSMC" to prove it was not connected to the Huawei investigation. Bitmain, a Chinese crypto equipment firm associated with Sophgo, has also denied involvement in the investigation, calling allegations "false and baseless." However, it's worth noting that Bitmain's track record on this kind of thing is far from spotless. As reported by Reuters, in 2021, prosecutors raided Bitmain's Taiwan offices and accused two of its affiliates of trying to illegally recruit Taiwanese engineers. Huawei has been subject to intense scrutiny and export controls going back to 2019, after fears the Chinese IT giant could bake backdoors into its equipment landed it on the US Entity list, which restricts the sale of sensitive goods and technologies to the firm without a license. Under the rules, TSMC ceased doing business with Huawei in compliance with these rules in 2020. Huawei's Ascend 910B is the Chinese tech giant's most sophisticated accelerator boasting processing speeds roughly on par with Nvidia's now four-year-old A100 with 320 teraFLOPS of FP16 or 640 teraFLOPS of Int8 performance. While maybe not the fastest chip out there, US trade restrictions on the sale of American-made accelerators have only gotten tougher in recent years. As of last October, the restrictions were so severe that even some high-end graphics cards aimed at gaming were banned from sale in the Middle Kingdom. These performance caps have apparently made homegrown accelerators from the likes of Huawei or Moore Threads more attractive, with several Chinese firms reportedly deploying large quantities of the Ascend 910B. TSMC for its part has previously said it's working with the US Commerce Department to resolve the matter and that it's "not aware of TSMC being the subject of any investigation at this time." ®

Bitmain-linked firm Sophgo denies supplying AI chips to Huawei

Chinese chip designer Xiamen Sophgo -- a firm with links to Bitmain -- has denied any business relationship with Huawei, after Taiwan Semiconductor Manufacturing Company (TSMC) cut dealings with it following a United States probe into potential sanctions violations. According to an Oct. 27 report from Reuters, Sophgo ordered chips from TMSC that matched the ones found on Huawei's Ascend 910B, citing two people familiar with the matter. The US Department of Commerce launched an investigation into whether TSMC knowingly supplied chips to Huawei, which has been subject to US sanctions since 2020 due to national security concerns, according to an Oct. 17 report from The Information. However, Sophgo denied having any business relationship with Huawei in an official statement on its website. Sophgo said the US probe into TSMC and Huawei was not related to Sophgo and its product and had never engaged directly or indirectly with Huawei. "Sophgo has been conducting business in strict compliance with applicable laws and regulations," added Sophgo. The US Commerce Department and TSMC reportedly found that "chips TSMC made for Xiamen Sophgo had designs similar to those of Huawei's artificial intelligence chips" according to The Information -- also citing two people familiar with the matter. Related: US tech exec warns China is 'a decade ahead' on quantum Sophgo was founded in 2019 by Bitmain co-founder Micree Zhan. Bitmain and Sophgo still reportedly share several domain registries and email directories to this day. Bitmain began looking into AI chip development in 2018 at the direction of Zhan, in a bid to bolster its chip offerings outside of crypto. This shift in strategy created tension between Zhan and fellow co-founder Jihan Wu, who said the company should remain focused entirely on producing Bitcoin mining rigs. Ultimately this point of difference -- along with other issues -- caused Zhan to be removed from the company in October 2019. Zhan's sudden ousting came as he was introducing Bitmain's "third generation" AI Chip -- the Sophgo BM1684 -- at a tech conference in China.

Bitcoin Miner Bitmain Caught Up In This Regulatory Crossfire

TSMC has halted shipments to the China-based chip designer Sophgo, an AI company associated with Bitmain co-founder and chairman Micree Zhan. Taiwan Semiconductors Manufacturing Company (TSMC) reportedly halted chip shipments to Xiamen Sophgo, a Chinese semiconductor firm linked with Bitmain co-founder and chairman Micree Zhan, amid an ongoing US investigation into possible sanctions violations related to Huawei. According to a reports, TSMC stopped supplying chips to Sophgo earlier this month after the US Commerce Department launched an investigation into whether TSMC had indirectly supplied chips to Huawei. Huawei has been under US sanctions since 2020 over national security concerns, with strict restrictions on its access to advanced technology. TSMC has halted shipments to the China-based chip designer Sophgo, an AI company associated with Bitmain. This happened after a chip from the Taiwan-based chipmaker was discovered inside a Huawei AI processor. Sophgo had reportedly ordered chips with TSMC identical to those used in the Huawei Ascend processor. This is amidst restrictions from acquiring such technology to prevent Huawei from doing so to protect US national security interests. No confirmation has been made that Xiamen Sophgo directly supplies chips to Huawei. Still, the key question is how this situation would affect the miner's ongoing relationship with TSMC. Bitmain is a privately held company based in Beijing, China. It specializes in the design of application-specific integrated circuit (ASIC) chips specifically for Bitcoin mining. Zhan started Xiamen Sophgo in 2019. The chipmaker TSMC provided the company hundreds of thousands of chips before their recent suspensions. According to the Chinese corporate records, it was verified that Zhan indirectly owns approximately 22% of Sophgo. He also owns and several subsidiaries of the latter have domain registrations and email contacts with the miner. TechInsights' teardown of Huawei's latest AI chip, the HiSilicon Ascend 910B, found that TSMC fabricated the chip. This is in contrast to the predecessor of the Ascend 910B, the Ascend 910A, which was fabricated by China's domestic chipmaker, SMIC. Following the discovery, TechInsights notified TSMC of its findings. In early October, the US Commerce Department inquired whether TSMC produced AI or phone chips for Huawei. Subsequently, it was reported that TSMC had stopped shipping products to a customer whose identity was not revealed, coinciding with the timing of the U.S. probe. Under Micree Zhan's leadership, Bitmain entered AI chip development in 2018 as part of its strategy to diversify its chip offerings. The move brought Zhan into conflict with his co-founder, Jihan Wu, who wanted the company to stick with its core business of developing Bitcoin ASICs. Ironically, this happened just as he prepared to announce its "third-generation AI chip," the Sophgo BM1684, at a Shenzhen conference. Today, the chips remain marketed on Xiamen Sophgo's website. The two settled on a deal in 2021 that allowed Zhan to return as chairman. Wu left Bitmain to assume leadership roles at Bitdeer and Matrixport. Since then, the company has stopped its direct involvement in developing AI chips.