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U.S. Set to Blacklist Chinese Chip Maker Sophgo Amid Huawei AI Processor Controversy

As the Biden administration approaches its conclusion, one of its final actions appears to be the impending blacklisting of Sophgo, a fabless Chinese semiconductor manufacturer. This company played a vital role in the design of a chip found within Huawei’s Ascend 910B AI processor, which was produced by Taiwan Semiconductor Manufacturing Company (TSMC), renowned as the largest chip foundry worldwide.

Sophgo, associated with the bitcoin mining hardware supplier Bitmain, is expected to face repercussions similar to those that impacted Huawei in 2019, when it was placed on the U.S. Department of Commerce’s Entity List. Companies on this list are prohibited from accessing U.S. suppliers without a special license from the Commerce Department. Following its listing, Huawei had to pivot, creating its proprietary HarmonyOS after losing access to Google Mobile Services and the Android operating system.

In a significant shift in export policies, the Commerce Department enacted a rule denying foundries utilizing American technology the ability to ship advanced semiconductors to Huawei, aiming to prevent the flow of 5G technology to the Chinese military. This policy was largely effective until the summer of 2023, when Huawei launched its Mate 60 Pro, featuring a cutting-edge 5G chip manufactured by China’s Semiconductor Manufacturing International Corporation (SMIC) using a 7nm process node. This marked Huawei’s return to the high-end smartphone market since the Mate 40 series, offering a device capable of 5G connectivity.

TechInsights discovered the TSMC-manufactured chip during a teardown of the Ascend 910B. Upon realization of the chip’s origins, TSMC notified the U.S. Commerce Department, which then confirmed the chip’s connection to Sophgo. As a result, TSMC halted shipments to Sophgo, and the U.S. authorities have since launched an investigation into the situation.

First released in 2022, Huawei’s Ascend 910B has been deemed the most sophisticated AI chip from a Chinese company. The successor, Ascend 910C, is set to enter mass production early next year and aims to rival NVIDIA’s leading AI processors. On November 11, the U.S. implemented a directive prohibiting TSMC from exporting advanced chips made with a 7nm process or finer to China. Interestingly, Huawei has claimed that it has not sourced chips from TSMC since the new export restrictions were introduced in 2020.

Sophgo has publicly asserted that it has “never been engaged in any direct or indirect business relationship with Huawei.” The company typically collaborates with local governments and state-owned enterprises, with China Telecom being a noted client. Recently, many of Sophgo’s AI chips have been acquired by state-run universities and law enforcement agencies in China, aimed at enhancing their artificial intelligence tools and surveillance capabilities.

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