Taiwan Semiconductor Manufacturing Company (NYSE:TSM) suspended shipments to China-based chip designer Sophgo after a chip it made was found on a Huawei AI processor, according to two people familiar with the matter.
Sophgo had ordered chips from TSMC that matched the one found on Huawei’s Ascend 910B, the people said. Huawei is restricted from buying the technology to protect U.S. national security. Reuters could not determine how the chip ended up on the Huawei product.
Sophgo said in a statement on its website on Sunday that it was in compliance with all laws and had never engaged in any business relationship with Huawei. Sophgo, which is affiliated with cryptocurrency mining equipment company Bitmain, said it had provided a detailed investigation report to TSMC to prove that it was not related to Huawei.
TSMC declined to comment. Huawei did not immediately respond to a request for comment. The U.S. Department of Commerce said it was aware of reports of potential violations of U.S. export controls but it could not comment on whether any investigation was ongoing.
Tech research firm TechInsights discovered the TSMC chip on Huawei’s Ascend 910B when it took apart the multi-chip processor, a different source told Reuters on Tuesday. Alerted to the finding, about two weeks ago TSMC notified the U.S.
TSM shares surrendered $7.07, or 3.5%, to $196.39.