The U.S. government is preparing to blacklist Sophgo, a Chinese company linked to the controversial dealings of Huawei Technologies. Sophgo, a subsidiary of the Bitcoin mining equipment manufacturer Bitmain, has been scrutinized for its alleged involvement in supplying a chip to Huawei’s Ascend 910B artificial intelligence processor. The situation has raised significant concerns regarding national security and compliance with trade regulations.
Earlier this month, the U.S. Commerce Department added several entities associated with Huawei to its restricted trade list. The scrutiny of Sophgo intensified following the findings of TechInsights, a technology research firm that dismantled the Huawei Ascend 910B processor. The firm discovered a chip manufactured by Taiwan Semiconductor Manufacturing Company (TSMC) that matched Sophgo’s design, suggesting a direct link between the two companies.
Sophgo has denied any direct or indirect business ties with Huawei. Despite this assertion, communication records indicate that Sophgo engaged with U.S. authorities in 2023 using a Bitmain email address, raising questions about the company’s transparency. Co-founded by Micree Zhan, who also co-founded Bitmain, Sophgo’s corporate structure complicates matters further. Zhan reportedly owns 23% of Sophgo and its subsidiaries through an investment vehicle, which may influence the company’s operations and affiliations.
Moreover, Sophgo has clarified that it has not supplied Huawei since 2020, when the U.S. enacted stricter export controls. However, the company’s past dealings, including supplying chips to Chinese state-run universities and police agencies for upgrading surveillance tools, have drawn attention and concern from U.S. officials.
As part of its investigation, TSMC promptly notified U.S. authorities about the situation and suspended shipments to Sophgo. The potential inclusion of Sophgo on the Entity List would necessitate that the company obtain a license to receive goods or technology from U.S. exporters—a request that is likely to be denied given the current geopolitical climate.
The U.S. Commerce Department is currently reviewing Sophgo’s case closely. If blacklisted, the company would face significant operational challenges, impacting its ability to conduct business internationally and raising further questions about its future in the tech industry.
Featured image courtesy of Tech Wire Asia
