TSMC stops chip shipments to China’s Sophgo, an AI firm linked to Bitmain co-founder and chairman Micree Zhan.
In the context of an ongoing U.S. investigation into potential sanctions violations related to Huawei, Taiwan Semiconductors Manufacturing Company (TSMC) has purportedly suspended chip shipments to Xiamen Sophgo. This Chinese semiconductor firm is associated with Bitmain co-founder and chairman Micree Zhan.
According to reports, the U.S. Commerce Department initiated an investigation into whether TSMC had indirectly supplied processors to Huawei, which resulted in the cessation of chip supply to Sophgo earlier this month.
Since 2020, Huawei has been subject to U.S. sanctions due to national security concerns, which include stringent limitations on its access to advanced technology.
Bitmain-Linked Firm Is Terminated by TSMC Due to Huawei Chip
TSMC has suspended shipments to Sophgo, a semiconductor designer affiliated with Bitmain, an A.I. company based in China. This occurred after discovering a microprocessor from the Taiwan-based chipmaker within a Huawei A.I. processor.
It was reported that Sophgo had ordered processors from TSMC that were identical to those used in the Huawei Ascend processor.
This occurs in the context of restrictions on acquiring such technology to prevent Huawei from doing so and safeguard U.S. national security interests.
There has yet to be a confirmation that Xiamen Sophgo directly supplies processors to Huawei. However, the primary inquiry is how this circumstance would influence the miner’s ongoing relationship with TSMC. The corporation Bitmain is privately owned and is situated in Beijing, China. It is dedicated to developing application-specific integrated circuit (ASIC) processors specifically designed for Bitcoin mining.
According to sources, the Commerce Department and TSMC recently discovered that certain semiconductors that TSMC produced for Xiamen Sophgo share design similarities with the chips that Huawei employs in AI-enabled computing.
TSMC’s decision to suspend shipments has resulted in Sophgo being scrutinized
In 2019, Zhan established Xiamen Sophgo. Before their recent suspensions, the company received hundreds of thousands of processors from the chipmaker TSMC. Zhan indirectly owns approximately 22% of Sophgo, as confirmed by Chinese corporate documents. Additionally, he owns several subsidiaries of the latter, which have domain registrations and email contacts with the miner.
The HiSilicon Ascend 910B, Huawei’s most recent A.I. processor, was discovered to have been manufactured by TSMC during TechInsights’ teardown. This contrasts with the Ascend 910A, the predecessor of the Ascend 910B, which SMIC, an indigenous chipmaker in China, manufactured. TechInsights promptly informed TSMC of its discoveries after the discovery.
In early October, the U.S. Commerce Department inquired whether TSMC manufactured A.I. or phone processors for Huawei. It was subsequently reported that TSMC had ceased shipping products to a customer whose identity was not disclosed, coinciding with the timing of the U.S. investigation.
As part of its strategy to diversify its chip offerings, Bitmain entered the A.I. chip development industry in 2018 under the leadership of Micree Zhan. The decision resulted in a disagreement between Zhan and his co-founder, Jihan Wu, who desired that the company remain focused on developing Bitcoin ASICs.
Rejecting Artificial Intelligence Chips Following Internal Conflict
The miner was ultimately the subject of a corporate struggle for control due to these disagreements and various management issues. In October 2019, Zhan was dismissed due to a dispute with his co-founder, Jihan Wu.
Ironically, this occurred as he was preparing to unveil its “third-generation A.I. chip,” the Sophgo BM1684, at a conference in Shenzhen. Today, the semiconductors are still being advertised on Xiamen Sophgo’s website.
In 2021, the two reached an agreement that enabled Zhan to resume his role as chairman. Wu departed Bitmain to occupy leadership positions at Matrixport and Bitdeer. Subsequently, the organization discontinued its direct involvement in developing artificial intelligence processors.