Huawei Ascend 910B AI chip has secret TSMC chip inside: Taiwan, US government investigating

Huawei unveiled its new Ascend 910B AI chip earlier this year, but it has been discovered that a chip made by TSMC was found inside of the AI processor... which isn't good, at all.

2

In a new report from the Taipei Times, we're learning that this could be a (huge) breach of US export restrictions, that have been in place against seeing sensitive technologies used by Chinese companies and the CCP government. This incident has triggered "significant concern" in the IT industry, as it appears that "proxy buyers are acting on behalf of restricted Chinese companies to bypass the US rules, which are intended to protect its national security".

How was this discovered? Canada-based research firm TechInsights performed a die analysis of Huawei's new Ascend P910B AI trainer, releasing its findings on October 9. Inside, was a TSMC chip that was part of a multi-chip system that Huawei used for the AI trainer, with TSMC informed of the discovery on October 23. TSMC said it had notified the governments in Taipei and Washington of the issue.

• Read more: China is at least 10 years behind Taiwan in advanced semiconductor manufacturing
• Read more: US Commerce Secretary: China seizing TSMC would be 'absolutely devastating' for US economy

Taiwan also has its own export controls, which prevent advanced semiconductor technology from being made in China, so it's not just the US that is concerned over this. TSMC said that it halted all shipments to Huawei on September 15, 2020, in compliance with fresh US regulations. A few days later, TSMC stopped shipments to Chinese chip designer Sophgo, with Reuters' sources saying that Sophgo had ordered chips from TSMC that "matched the one found on the Huawei device".

The Taipei Times reports: "Sophgo was established in 2019 and is affiliated with Bitmain, a Chinese cryptoequipment company that has offices in Taiwan. Bitmain's Taiwan operations were raided in 2021, with prosecutors accusing two Bitmain affiliates of illegally recruiting Taiwanese engineers, and illegally conducting research and development activities. Bitmain reportedly used to have a cooperative relationship with Huawei and once introduced a former Huawei executive to sit on Sophgo's board".

• Read more: ASML's former CEO says US and China 'Chip War' could 'continue for decades'
• China president: we don't need ASML, 'no force can stop the pace of China' tech development

We all know Chinese tech companies have been looking at every which way possible in which they can get their hands on advanced equipment and technologies from other countries, with Reuters reporting in August that Chinese state-linked entities had started looking at Amazon's cloud service (and other companies) to access advanced US chips and AI capabilities that couldn't be purchased anywhere else.

The Taipei Times continues: "While providing access to such chips or advanced AI models through the cloud is not a contravention of the US regulations, experts have warned that restricted items might be transferred by proxy buyers to China, which repackages them, disguising the components as Chinese-made. TSMC, as well as authorities in Taiwan and the US, must see the Ascend 910B incident as a warning about the reality of proxy buyers and the implications for national security. All three must carefully investigate how the TSMC chip ended up in Huawei's possession".

• Read more: China would drop NUCLEAR BOMBS non-stop on Japan if it defends Taiwan
• Read more: China: we will retaliate against Japan if US-led chip restrictions continue to stem sales

US Representative John Moolenaar, chairman of the House Select Committee on Strategic Competition between the US and the Chinese Communist Party has called the incident with Huawei a "catastrophic failure" of US export control policies. TSMC is making chips for most of the big tech companies across the planet, and wouldn't want to risk its gold-star reputation and market access by skirting around US regulations to sell chips to banned Chinese companies.

But now, the Taiwan and US governments are going to be knee-deep in some troubling times, hours before the 2024 US elections is called.