TSMC Cuts Off Bitmain-Linked Firm Over Huawei Chip Shipments

TSMC has halted shipments to the China-based chip designer Sophgo, an AI company associated with Bitmain. This happened after a chip from the Taiwan-based chipmaker was discovered inside a Huawei AI processor.

Taiwan Semiconductors Manufacturing Company (TSMC) has reportedly halted chip shipments to Xiamen Sophgo, a Chinese semiconductor firm linked with Bitmain co-founder and chairman Micree Zhan.

The move comes amid an ongoing US investigation into possible sanctions violations related to Huawei.

According to a report by the Financial Times, TSMC stopped supplying chips to Sophgo earlier this month after the US Commerce Department launched an investigation into whether TSMC had indirectly supplied chips to Huawei.

Huawei has been under US sanctions since 2020 over national security concerns, with strict restrictions on its access to advanced technology.

The US alleges that Sophgo, which is backed by Zhan, has been supplying chips to Huawei despite the sanctions.

TSMC, the world’s largest contract chipmaker, has denied any wrongdoing and said it is cooperating with the US investigation.

In a statement to the Financial Times, TSMC said: “We have robust export control measures in place and fully comply with applicable laws and regulations in the markets we operate in, including the US Foreign Direct Product Rule.”

“We are cooperating with the relevant authorities on this matter and will continue to take necessary steps to ensure compliance.”

Zhan, who co-founded Bitmain in 2013, left the company in 2021.

However, he remains a major shareholder in the world’s largest cryptocurrency mining hardware producer.

Xiamen Sophgo, founded in 2021, is an AI chip designer. The company’s website states that it is “dedicated to providing high-performance, low-power and cost-effective AI chips for various applications.”

Among Sophgo’s investors is Bitmain, which is also headquartered in Xiamen.

The US investigation into TSMC’s possible role in supplying chips to Huawei is part of a broader effort by the Biden administration to crack down on technology transfers to China.

The administration is concerned that such transfers could help China’s military and economic development, to the detriment of US interests.

In recent months, the US has also placed several Chinese companies on a trade blacklist, restricting their access to US technology.

Among the companies blacklisted are Hangzhou Hikvision Digital Technology and Zhejiang Dahua Technology, both of which are surveillance equipment manufacturers.

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