[News] Huawei’s Proxy Tactics for Advanced Chips Expose New U.S. Sanctions Loophole

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TSMC has recently been implicated in a controversy surrounding Huawei’s Ascend 910B chip, which was reportedly manufactured by TSMC. According to Reuters, Huawei placed its chip orders through a proxy, Chinese firm Sophgo.

Although Sophgo quickly issued a statement on its website denying any connection with Huawei, TechNews cited industry sources suggesting that Huawei has exploited proxy firms like Sophgo to bypass U.S. sanctions. These sources say the chips are ordered by a third party, shipped back to China, then split and advanced-packaged to create AI processors.

In the same report, an anonymous semiconductor industry insider revealed that the 910B chip was previously paired with HBM2E memory but was found this time in a variant containing TSMC’s 7nm HPC chip. Huawei reportedly uses proxy companies to obtain TSMC-manufactured chips, bringing them back to China for IC splitting and advanced heterogeneous packaging into AI chips.

This time, the proxy was none other than Sophgo, the firm revealed in Reuters’ initial report. In response, Sophgo emphasized on its website that it has no direct or indirect business dealings with Huawei and that it complies with U.S. export control regulations.

However, according to a TMTPOST report, public records show that the legal representative for Xiamen Sophgo Technologies Co., Ltd., is Zhao Hong’ai, with around 30% ownership. After multiple layers of shareholder tracing, Bitmain co-founder Micree Zhan is revealed to still own over 20% of Sophgo.

Bitmain, Sophgo’s parent company, reportedly had ties with Huawei in its early years and hired former Huawei employees as legal representatives and executive directors when Sophgo first launched, indicating close connections between the two companies.

TechNews reports that Huawei’s use of proxies to secure advanced semiconductor processes through major foundries has been an open secret in the industry. Huawei’s drive to develop these chips is part of its AI ambitions.

Although Huawei’s Ascend series currently cannot compete with NVIDIA in computing power, it is understood that advanced packaging using heterogeneous integration offers greater flexibility in wafer manufacturing orders. This approach also allows Huawei to more easily outsource wafer production through proxies, bypassing U.S. restrictions and achieving significant gains in AI chip performance.

(Photo credit: Huawei)