By Alexandra Alper and Karen Freifeld
(Reuters) -The Biden administration plans to blacklist a Chinese company whose TSMC-made chip was illegally incorporated into a Huawei artificial-intelligence processor, according to a person familiar with the matter.
The Chinese company, Sophgo, drew attention after a chip found on Huawei’s Ascend 910B multi-chip system matched one it ordered from Taiwan Semiconductor Manufacturing Company.
Sophgo is the latest Chinese company slated to be punished by the U.S. for helping Huawei. Earlier this month, the Commerce Department added other companies viewed as part of Huawei’s shadow network to the U.S. Commerce Department’s restricted trade list.
Sophgo, an affiliate of bitcoin mining equipment supplier Bitmain, is in the process of being placed on the list, known as the Entity List, the source said.
Companies are added to the list for activities contrary to U.S. national security and foreign policy interests. Exporters are then barred from shipping goods and technology to them without a license, which is likely to be denied.
China’s Huawei, a telecommunications equipment maker and technology conglomerate, was placed on the list in 2019. Since 2020, it has been a violation to ship even foreign-made chips to the company without a license.
A spokesperson for the Commerce Department declined to comment.
Sophgo did not immediately respond to requests for comment. In an October statement, the company said it “has never been engaged in any direct or indirect business relationship with Huawei.”
This fall, tech research firm TechInsights took apart the Huawei 910B, discovered the chip and informed TSMC, which notified the U.S. Commerce Department, as Reuters reported in October. After determining the chip matched Sophgo’s design, TSMC suspended shipments to the company, sources said.
TSMC, the world’s largest contract chipmaker, said in October it has not supplied Huawei since 2020.
A Taiwan official said that month that TSMC alerted Taiwan and U.S. authorities and began a detailed investigation.
A TSMC spokesperson declined comment on Friday about what the investigation had turned up.
Huawei said in October it has not produced any chips via TSMC since the U.S. imposed new export rules on the company in 2020. It did not immediately respond to a request for comment on Friday.
(Reporting by Karen Freifeld and Alexandra Alper. Additional reporting by Fanny Potkin. Editing by Chris Sanders, Chizu Nomiyama and Rod Nickel)
