US plans to blacklist company that ordered TSMC chip found in Huawei processor, source says

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 US for helping Huawei. This month, the Commerce Department added other companies viewed as part of Huawei’s shadow network to the US 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 US 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 US Commerce Department spokesperson 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.”

Sophgo is a supplier to local governments and state-owned firms such as China Telecom, according to tenders reviewed by Reuters.