Sophgo ordered chips from TSMC that matched the one found on Huawei’s Ascend 910B, the people said. The US has restricted Huawei from buying this technology. 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 complies with all laws and has never engaged in a business relationship with Huawei. Sophgo, which is affiliated with cryptocurrency mining equipment company Bitmain, said it provided a detailed investigative report to TSMC to prove it was not related to Huawei.

TSMC declined to comment. Huawei did not immediately respond to a request for comment. The US Commerce Department said it was aware of reports of potential violations of US export controls, but could not comment on whether an investigation was ongoing.

Technology research firm TechInsights discovered the TSMC chip on Huawei’s Ascend 910B when it took apart the multi-chip processor, another source told Reuters on Tuesday. Alerted by the finding, about two weeks ago TSMC notified the US, the source said.

Around the same time, TSMC also halted shipments to a customer, Reuters reported on Wednesday, citing an official in Taiwan who said the suspension came after the company discovered that a chip it supplied to the customer had ended up in a Huawei product.

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TSMC has alerted authorities in Taiwan and the US and has begun a detailed investigation, the official said. But the official did not name the client, which the latest sources identified as Sophgo. News service Information tech also reported the name on Saturday.

TSMC, the world’s largest chipmaker, said earlier this week that it had not supplied Huawei since mid-September 2020 and that it had “proactively communicated” with the Commerce Department about the issue.

“We are not aware that TSMC is the subject of any investigation at this time,” the company said in a statement.

Shenzhen-based Huawei said in a statement on Tuesday that it did not produce any chips through TSMC after the US imposed new export rules on the company in 2020.

In 2020, the US expanded its authority to stop shipments of foreign-made items to Huawei that are the direct product of US technology or software, including TSMC chips.

Before then, TSMC supplied chips for the Huawei Ascend series, sources told Reuters earlier this year. The Ascend 910B, due in 2022, is seen as the most advanced AI chip available from a Chinese company.

In August, Taiwan’s Research Institute for Democracy, Society and Emergency Technology (DSET) reported that Bitmain, which it described as a leading Chinese integrated circuit designer and supplier of cryptocurrency mining machines, “aims to challenge dominance in the AI ​​chip market. by Nvidia and AMD.”

The DSET report described Sophgo as a Bitmain affiliate.

Sophgo was co-founded by Micree Zhan, who also co-founded Bitmain, according to a corporate registration database.

The company also communicated with the US Federal Communications Commission in 2023 using a Bitmain email address and the name Xiamen Sophgo Technologies Ltd.

In 2021, prosecutors raided Bitmain’s operations in Taiwan and charged two Bitmain affiliates with illegally recruiting semiconductor engineers from Taiwan and conducting illegal research and development, according to a statement from the New Taipei City Prosecutor’s Office.

Four Taiwanese defendants pleaded guilty and received fines, according to the statement.

Sophgo’s website says it has research and development centers in more than 10 cities in China and other countries.