U.S. Moves to Blacklist Chinese Company Sophgo for Huawei AI Chip Involvement

U.S. Moves to Blacklist Chinese Company Sophgo for Huawei AI Chip Involvement

The Biden administration plans to blacklist Sophgo, a Chinese company, following its role in incorporating a Taiwan Semiconductor Manufacturing Company (TSMC)-made chip into a Huawei artificial-intelligence processor. This action highlights ongoing U.S. efforts to limit Chinese companies’ access to advanced technologies with potential national security implications.

The Controversial Chip Discovery

Sophgo came under scrutiny after a TSMC-made chip found in Huawei’s Ascend 910B multi-chip system was traced back to a Sophgo design. The chip’s unauthorized use in a Huawei product led to an investigation, which confirmed the connection to Sophgo. This revelation prompted TSMC to suspend shipments to the company, as part of its compliance with U.S. restrictions.

Sophgo’s Denial and Its Business Connections

Sophgo, an affiliate of Bitmain, a prominent bitcoin mining equipment supplier, denied any business relationship with Huawei. However, the company is known to supply AI chips to Chinese state-run universities and police stations, which have been building AI tools and upgrading surveillance systems. Despite these ties, Sophgo claims it does not engage directly or indirectly with Huawei.

U.S. Entity List and Export Restrictions

The U.S. Commerce Department’s move to add Sophgo to the Entity List will restrict American companies from exporting goods and technologies to the company without a special license. The Entity List is a key tool used by the U.S. government to block companies that are seen as threats to national security or foreign policy interests.

Since 2019, Huawei has been placed on the list, with its access to foreign-made chips restricted. As of 2020, any shipment of chips, even those manufactured outside of the U.S., requires a special license, which is likely to be denied.

The Role of TSMC and TechInsights

TSMC, the world’s largest contract chipmaker, suspended shipments to Sophgo after learning about the connection to Huawei. TSMC had stopped supplying chips to Huawei in 2020, in compliance with U.S. export restrictions. The issue was uncovered by TechInsights, a tech research firm, which disassembled the Huawei Ascend 910B and found the TSMC-made chip inside. The firm then informed TSMC, which subsequently alerted the U.S. Commerce Department.

Implications for U.S.-China Technology Tensions

This move against Sophgo is part of the ongoing U.S. strategy to curb China’s technological advances, especially in AI and telecommunications. The addition of Sophgo to the Entity List underscores the growing tensions between the U.S. and China over access to critical technologies and the use of these technologies in national security and surveillance operations.