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TSMC has stopped supplying production to Chinese company Sophgo, believed to be a proxy used by Huawei to manufacture its Ascend 910B, Reuters reports. The decision is directly related to the recent discovery that TSMC provided Huawei via proxy despite US export restrictions.

Reuters claims that Sophgo ordered a chip (allegedly called the Ascend 910B) from TSMC that closely resembled the Ascend 910 processor originally manufactured by TSMC. TechInsights discovered the “close resemblance” and published an article clarifying that the chip was indeed manufactured by TSMC and not SMIC, as previously reported.

In response to the ruling, Sophgo reportedly issued a statement asserting that it fully complied with all legal requirements and had no direct commercial ties with Huawei. The company, which has ties to Bitmain, a well-known producer of cryptocurrency mining equipment, also conducted an internal investigation. To clarify its position, Sophgo submitted a report to TSMC, seeking to confirm that it was not involved in any unauthorized transfer to Huawei.

The U.S. Commerce Department acknowledged it was aware of reports that U.S. export restrictions may have been violated, but declined to comment on any ongoing investigations, according to Reuters. Sophgo’s supply chain connections have therefore come under scrutiny due to potential risks from export control violations, although the department refrained from addressing specific details of the case, according to Reuters.

Huawei’s attempt making a chip through TSMC reflects a broader strategy to continue taking advantage of Western-designed technologies. The company often hides its chip suppliers to avoid possible conflicts with its partners in the event of a supplier disruption, which is exactly the case at the moment. One method Huawei uses to circumvent sanctions is to indirectly purchase chips or wafers, use third parties to secure the necessary components, and then obfuscate these connections through various tactics.

We debated, in the Tom’s material press room, whether this approach could be feasible for advanced processors like Huawei’s Ascend or Kirin – and yet here we are. The proxies work and only one got caught.