The Biden administration plans to add Chinese company Sophgo to the U.S. Entity List for its role in providing a chip manufactured by Taiwan Semiconductor Manufacturing Company (TSMC) that was allegedly used in Huawei’s advanced AI processor, according to an informed source.
Sophgo, affiliated with bitcoin mining firm Bitmain, is accused of indirectly supporting Huawei, which has been under U.S. restrictions since 2019. The move follows the recent addition of other Chinese firms to the blacklist for forming part of what U.S. officials describe as Huawei’s shadow network.
Being placed on the Entity List means companies are prohibited from receiving U.S. goods or technology without a license, which is generally denied. Sophgo has denied any direct or indirect business relationship with Huawei.
The controversy centers on Huawei’s Ascend 910B AI chip, which incorporates a component matching a design ordered by Sophgo from TSMC. Tech research firm TechInsights identified the chip, prompting TSMC to suspend shipments to Sophgo and notify U.S. authorities. TSMC has denied supplying Huawei since 2020, adhering to export rules.
Huawei’s diversification efforts have placed it at the forefront of China’s AI ambitions, despite U.S. restrictions. The Ascend 910B, launched in 2022, is considered the most advanced AI chip from a Chinese company. Huawei plans to mass-produce its Ascend 910C chip by early 2025 to compete with U.S.-based Nvidia.
Sophgo supplies state-owned firms and institutions in China, including universities developing AI tools and police departments enhancing surveillance systems, according to procurement records. Sophgo’s co-founder, Micree Zhan, who also co-founded Bitmain, indirectly owns a significant stake in the company.
The U.S. has intensified its measures against China’s semiconductor advancements, including ordering TSMC to halt shipments of advanced chips to China starting November 11. The restrictions aim to limit China’s ability to develop cutting-edge technologies for AI and other sensitive applications.
As Huawei continues to adapt and expand its chip capabilities, the blacklisting of Sophgo underscores escalating tensions between the U.S. and China over technology and national security.