TMTPOST – Amid recent scrutiny over U.S. chip export controls, Chinese AI and semiconductor design company Sophgo Technologies issued a statement early on Monday, saying “the investigation of the U.S. Commerce Department on possible TSMC and Huawei link is not related to Sophgo and its product. Sophgo has never been engaged in any direct or indirect business relationship with Huawei.”

This statement follows reports that Taiwan Semiconductor Manufacturing Company (TSMC) cut the company (Sophgo) off around the time the U.S. Commerce Department began investigating whether TSMC had supplied chips to Chinese tech giant Huawei Technologies.

In response, Sophgo affirmed its strict adherence to U.S. export control regulations, adding that it has provided detailed investigation report to TSMC to prove that the company is not related to the Huawei investigation. Sophgo emphasized that it operates within the bounds of all applicable export laws, saying, “Sophgo has never been in violation of any of such laws and regulations.”

The statement underscores the heightened scrutiny on global semiconductor supply chains, particularly as U.S.-China tech tensions grow.

Sophgo’s response also includes a firm disclaimer that it reserves all the rights to take legal actions against any individual or entity infringing upon the company’s business reputation, including hostile competitor and media releasing and disseminating false and misrepresenting reports.

TSMC has yet to issue a response on the matter as of this report's release.

Founded in 2020, Sophgo Technologies specializes in AI and RISC-V chip design, emerging from the split of Beijing-based Bitmain Technologies’s AI-focused business unit.

Bitmain, a leading developer of cryptocurrency mining hardware since its inception in 2013, expanded into AI chip development under its Sophon brand in 2016. In 2020, after a high-profile corporate restructuring at Bitmain involving co-founders Wu Jihan and Micree Zhan, the Sophon division was rebranded as Sophgo, with Zhan as a major shareholder.

Sophgo’s development trajectory has since focused on advancing its product line, from the CV182 series and BM1684X chips in 2021-2022 to the RISC-V-based SG2042 chip in 2023, and the BM1690 TPU for AI applications in 2024. Manufactured through TSMC’s facilities, these products have made Sophgo a prominent name in the AI chip market.

According to public records, TSMC has produced hundreds of thousands of chips for Sophgo in recent years, strengthening a critical supply relationship. However, as of the current investigation, reports indicate TSMC has paused its shipments to Sophgo amid compliance reviews.

The U.S. Bureau of Industry and Security (BIS) has reportedly been investigating whether TSMC, in collaboration with other design companies, has been indirectly supplying chips to Chinese entities under export restrictions.

BIS spokespersons have not confirmed any ongoing investigation involving Sophgo, but they reaffirmed the bureau’s commitment to upholding stringent export controls aimed at limiting China’s acquisition of advanced semiconductors.

The investigation reflects the broader geopolitical tensions affecting the tech industry, as regulatory authorities increase oversight on semiconductor trade to prevent technology transfer in sensitive areas. For Sophgo, the U.S. scrutiny on TSMC brings increased risk, given the key role TSMC’s advanced manufacturing capabilities play in its product output.

As both industry and regulatory dynamics evolve, this case exemplifies the complex landscape in which technology firms like Sophgo must navigate to maintain strategic partnerships and operational continuity.

For now, Sophgo’s focus continues to be mitigating any negative fallout from the investigation and safeguarding its relationships within the global semiconductor supply chain.