Some of the world’s most protected semiconductor technologies have found their way into new artificial intelligence chips from Chinese company Huawei Technologies, showing the limits of the United States’ broad attempts to thwart such hardware connections.
Basic circuits produced by Taiwan Semiconductor Manufacturing Co. have been discovered in Huawei’s Ascend 910B chips, according to people familiar with the matter and TechInsights, a Canada-based research firm that conducts teardowns of products that have already hit the Washington radar.
The Huawei AI chip is one of the main Chinese alternatives to Nvidia’s high-end offerings that remain off-limits to buyers in China. Some of the technology comes from TSMC, the world’s largest contract chipmaker, whose market capitalization of about $1 trillion exceeds that of Tesla and Walmart.
The episode underscores the daunting task of stifling China’s technology supply chain, despite the scale of U.S. export controls and sanctions. Huawei, which has benefited from billions of dollars of public support in recent years, has become one of China’s national technology champions and is at the forefront of the country’s AI ambitions.
Central to the Biden administration’s strategy is to hinder China’s AI efforts, which have national security implications due to their potential military applications. The Commerce Department’s Bureau of Industry and Security said it remained committed to “ensuring compliance” with advanced chip export controls linked to China and indicated it was aware of recent reports of potential violations.
The TSMC circuits in question should be inaccessible to Huawei, which has faced US sanctions since September 2020 for national security reasons.
Based on a preliminary internal investigation, TSMC believes its technology was somehow routed through Sophgo, a Chinese chip company, although others may be involved, according to people familiar with the case. A less likely scenario discussed internally involves that the TSMC circuits – or “dies” in chip industry parlance – were taken from a Huawei stockpile accumulated before US sanctions more than four years ago, they said. indicated the sources.
What Sophgo may have purchased from TSMC has not been previously reported. A TSMC spokesperson said it would take prompt action, including investigations, if there were any problems and would stay in contact with U.S. officials.
TechInsights is a chip industry research company founded in 1989. On its website, the company states that its reverse engineering, teardown, and semiconductor market analysis activities have an audience of more than 650 companies and 100,000 users.
Two TechInsights reports, published last month, linked TSMC’s circuitry to the Huawei AI chip.
The orders to Sophgo were reported internally at TSMC last month, according to people familiar with the matter. The Taiwanese chipmaker also recently canceled Sophgo orders considered suspicious and reported the matter to U.S. regulators, the sources said.
After The Wall Street Journal requested comment last month, Sophgo denied any business ties to Huawei in a statement posted on the company’s social media account. The Chinese company added that it shared a detailed investigation report with TSMC to prove that it was not involved. Contacted on Tuesday, the company referred to its previous press release.
The TSMC chips initially purchased by Sophgo could have been dumped on gray markets, industry officials say, which is what some chip buyers do when they find themselves with excess inventory.
Huawei said it has not produced any chips through TSMC since it was sanctioned by the United States. The Ascend 910B is one of Huawei’s best AI-related chips, designed for high-performance computing and AI-intensive applications.
A separate TechInsights teardown last year of another Huawei chip prompted a Commerce Department review. Echoing the report’s findings, Commerce Secretary Gina Raimondo said U.S. export controls had succeeded in limiting the performance of the Huawei chip, making it “nowhere near as good” as alternatives. point.
Write to Yang Jie at jie.yang@wsj.com and Joyu Wang at joyu.wang@wsj.com
