The U.S. government is set to add Sophgo, a Chinese tech company, to the Department of Commerce's Entity List for acting as an intermediary between blacklisted Huawei and TSMC, according to a report by Reuters. This action aims to curb Huawei's ability to procure advanced chips while effectively ending Sophgo's operations.
Sophgo's Role and Sanctions Violation
Since September 2020, Huawei has been restricted from purchasing chips made using American technologies. Sophgo is accused of violating U.S. export rules by placing orders with TSMC for Huawei-designed Virtuvian computing chiplets, components of Huawei's Ascend 910 processor. As a result, Sophgo will be unable to obtain advanced chips, impacting its ability to operate.
Investigation and Bitmain Connection
The issue was uncovered by research firm TechInsights during a teardown of Huawei's Ascend 910 processor. After confirming the match, TSMC halted shipments to Sophgo and alerted relevant authorities. Sophgo is affiliated with Bitmain, a Chinese Bitcoin mining equipment supplier. Micree Zhan, Bitmain's co-founder, indirectly holds a 23% stake in Sophgo. Although Sophgo denies any business connections with Huawei, reports indicate it has been supplying AI processors to Chinese government entities.
Future Implications
While this action will limit Huawei's access through Sophgo, it highlights the ongoing trend of using proxies to obtain restricted technologies. It remains unclear how many other intermediaries Huawei might be using. The crackdown on Sophgo suggests that the U.S. government is actively pursuing measures to enforce its chip sanctions on China.
