According to a Reuters report, TSMC (Taiwan Semiconductor Manufacturing Company) has reportedly suspended its supply to the Chinese chip design company Sophgo due to the discovery of TSMC-manufactured chips in Huawei’s AI processors, with Sophgo potentially being a supplier for Huawei. This incident has raised concerns about possible violations of U.S. export control regulations, prompting investigations by both the U.S. and Taiwanese governments. The situation also involves Bitmain, a Bitcoin mining company, as the co-founder of Sophgo is Micree Zhan, who is also the founder of Bitmain.
Rumors suggest TSMC has halted shipments to Sophgo
Sources indicate that TSMC, the world’s largest semiconductor foundry, has suspended supplies to the Chinese chip design company Sophgo. The reason for this suspension is the discovery of a chip in Huawei’s AI processor “Ascend 910B” that matches a product ordered by Sophgo. TSMC’s actions reflect the company’s heightened awareness of potential supply chain compliance issues, particularly amid escalating U.S.-China tech competition.
Sophgo denies direct cooperation with Huawei, Bitmain issues statement
Sophgo stated on its official website that the company fully complies with all relevant laws and has never established any business relationship with Huawei. Sophgo noted that it has submitted a detailed investigation report to TSMC to demonstrate that its supply chain processes are unrelated to Huawei. It is worth mentioning that Sophgo is considered to be affiliated with Bitmain, a cryptocurrency mining equipment company, and its connections to the crypto industry have raised external concerns. According to The Information, Bitmain and Sophgo shared multiple domain name registration agencies and email addresses in 2019. However, there have been past reports labeling the company as a “Huawei front,” revealing that “the legal representative of Xiamen Sophgo Technology Co., Ltd. is Zhao Hong’ai, who holds approximately 30% of the shares, and through multiple layers of penetration, Micree Zhan, co-founder of Bitmain, still holds over 20% of shares in Sophgo.” In response, Bitmain stated, “Bitmain has no relation to the recent media reports regarding the supply investigation, and any claims that Bitmain is involved in the aforementioned incident are false reports.”
Sophgo statement
U.S. Department of Commerce and Taiwanese government quickly intervene in investigation
Regarding the incident, the U.S. Department of Commerce has acknowledged reports of potential violations of export control regulations but has not disclosed whether an investigation is underway. According to Taiwanese government sources, TSMC promptly notified relevant agencies in Taiwan and the U.S. after discovering its chips appeared in Huawei products and has initiated a detailed investigation of its supply chain. TSMC’s actions underscore its cautious approach to technology transfer and export compliance issues.
TSMC emphasizes it halted shipments to Huawei since 2020
TSMC stated that it has fully stopped direct chip supply to Huawei since mid-September 2020. The company also emphasized its proactive communication with the U.S. Department of Commerce to ensure compliance with U.S. export control regulations. TSMC’s position reflects its commitment to supply chain transparency and compliance operations in the global market environment. TSMC’s actions not only demonstrate the challenges the company faces under geopolitical and technology transfer pressures but also serve as a warning to the global tech industry to pay closer attention to compliance risks amid intensifying U.S.-China tech competition. As the U.S. continues to strengthen its technological blockade against Huawei, multinational chip manufacturers like TSMC may face more complex regulatory environments and compliance pressures in the future