Taiwan Semiconductor Manufacturing Company (TSMC), the leading semiconductor foundry, has recently been reported to have a customer suspected of violating the US chip export ban by acting as an intermediary to sell chips to Chinese technology giant Huawei. TSMC has halted shipments to this customer, and it has now been revealed that the customer in question is Sophgo, a chip design company owned by the Chinese cryptocurrency mining company Bitmain. However, Sophgo has issued a statement denying these allegations.
Background:
Huawei, along with 70 affiliated companies, was blacklisted by the US in 2019. Since September 2020, TSMC has stopped shipping chips to Huawei. However, semiconductor research firm TechInsights recently discovered that Huawei’s latest AI chip, the HiSilicon Ascend 910B, was manufactured by TSMC. TechInsights notified TSMC of this finding.
Upon discovering that the chips it manufactured for a specific customer ended up in Huawei’s products, TSMC took immediate action. In mid-October, TSMC stopped shipping to this customer and reported the situation to the US and Taiwanese governments.
Did Sophgo place an order for Huawei?
According to a report by The Information on the 26th, this customer is Sophgo, a chip design company owned by Bitmain, a Chinese cryptocurrency mining company. TSMC had stopped supplying chips to Sophgo earlier this month, while the US Department of Commerce was investigating whether TSMC was supplying chips to Huawei. The report did not confirm whether Sophgo directly supplied chips to Huawei after obtaining them from TSMC. It is currently unclear how the relationship between Bitmain and TSMC might be affected. Bitmain is currently the world’s largest manufacturer of Bitcoin ASIC mining machines.
However, The Information quoted two informed sources as saying that the US Department of Commerce and TSMC recently discovered that “the chips manufactured by TSMC for Sophgo are similar to Huawei’s AI chip design.”
Sophgo, co-founded by Bitmain’s co-founder Micree Zhan in 2019, focuses on AI and RISC-V chip product designs and sells products to local Chinese governments. TSMC has been delivering “hundreds of thousands of chips” to Sophgo, according to Chinese corporate registration data. Micree Zhan indirectly holds about 22% of Sophgo’s shares, and some of Sophgo’s subsidiaries share domain name registration and email contact information with Bitmain.
Sophgo denies the allegations:
However, Sophgo released a statement today emphasizing that the US Department of Commerce’s investigation into the possible relationship between TSMC and Huawei is unrelated to Sophgo and its products. Sophgo has never established any business relationship, direct or indirect, with Huawei.
Sophgo stated that the company has always strictly complied with applicable laws and regulations, including but not limited to all applicable US national export control laws and regulations, and has never violated any of these laws and regulations. Sophgo has provided TSMC with a detailed investigation report to prove that the company is not related to the Huawei investigation. The company also reserves the right to take legal action against individuals or entities that infringe upon its corporate reputation, including hostile competitors and media outlets that publish and disseminate false and misleading reports.