(Bloomberg) — An investigation of Huawei Technologies Co.’s latest AI offering has unearthed an advanced processor made by Nvidia Corp. manufacturing partner Taiwan Semiconductor Manufacturing Co., suggesting that China is still struggling to reliably make its own advanced chips in sufficient quantities.
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Canada-based research firm TechInsights recently took apart at least one of the Shenzhen conglomerate’s highest-end artificial intelligence accelerators and discovered an Ascend 910B chip manufactured by TSMC, according to people familiar with a recent teardown of the devices. They requested anonymity to discuss a report that isn’t public.
Huawei has been on a US sanctions list since August 2020, meaning the company is barred from doing business with TSMC and its contract chipmaking peers without a US government license. In the past year, Huawei has relied on local partner Semiconductor Manufacturing International Corp. for production, including a 7-nanometer chip debuted last August in a Huawei smartphone.
US officials have repeatedly cast doubt on SMIC’s ability to make 7-nm chips at scale and questioned the performance of those components. Huawei’s use of TSMC output for its latest AI chips may be a sign that reinforces that narrative. It remains unclear how and when Huawei obtained the TSMC chips. The Taiwanese chipmaker has said it stopped all shipments to Huawei after Sept. 15, 2020, which the company reiterated when asked about the TechInsights report.
“TSMC is a law-abiding company, and we are committed to complying with all applicable rules and regulations, including applicable export controls. In compliance with the regulatory requirements, TSMC has not supplied to Huawei since mid-September 2020,” the company said in an emailed statement. “We proactively communicated with the US Commerce Department regarding the matter in the report. We are not aware of TSMC being the subject of any investigation at this time.”
In its own statement, Huawei said it hasn’t “produced any chips via TSMC after the implementation of the amendments made by the US Department of Commerce to its FDPR that target Huawei in 2020,” a reference to the foreign direct product rule — a US trade restriction. “Huawei has never launched the 910B chip,” the company said.
TechInsights declined to comment. A Commerce Department spokesperson said that the agency’s Bureau of Industry and Security, which is responsible for semiconductor trade restrictions, is “aware of reporting alleging potential violations of US export controls.”
“We cannot comment on whether any investigation is ongoing,” the spokesperson said. “BIS is committed to ensuring compliance with the robust controls we have put in place related to China’s acquisition of advanced semiconductors.”
BIS officials met with TSMC executives in mid-October about issues relating to the chipmaker’s supply chain, including whether third-party distributors may provide China the ability to access restricted technology, according to one of the people, who described the meeting as collaborative. The meeting didn’t touch on the TechInsights report, the person said.
The Information reported earlier that Commerce Department officials had reached out to TSMC about whether the company had produced chips for Huawei.
Huawei’s 910 accelerator — the precursor to 910B — was in production in 2019, before the US government expanded sanctions on the Chinese telecom giant. Huawei stockpiled TSMC chips around that time, which allowed the company to use a TSMC 5-nanometer chip, which is a generation ahead of 7-nanometer, in a laptop it released late last year.
AI accelerators — chips used to develop artificial intelligence models — have become a prized commodity in the tech industry. Santa Clara, California-based Nvidia uses TSMC to produce its market-leading versions, and has seen its sales and valuation explode in the past two years. The US has limited exports of cutting-edge Nvidia chips to China, and Huawei is offering its accelerators as a domestic alternative.
It’s not clear whether Huawei had designed or placed orders for the 910B chip prior to its blacklisting. The processor was first spotted in server products as early as 2022, according to Washington-based think tank Center for Security and Emerging Technology.
It started gaining exposure in Chinese news outlets in 2023, though Huawei has not officially hosted a launch event. Iflytek Co. unveiled a new server product with the AI accelerator in August 2023, and Baidu Inc. also ordered over 1,000 910B units last year, according to Taipei-based research firm TrendForce.
–With assistance from Gao Yuan and Jessica Sui.
(Updates with Huawei response in sixth paragraph.)
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