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US bans over two dozen Chinese firms to curb chip supply to Huawei

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US Chinese firms Huawei chip

US is blocking all those suspected Chinese firms helping Huawei with chip supply. The authorities added over two dozen China-based companies to the Entity List on Wednesday, closing the loopholes that might help the country grow in tech field.

The strategy follows up on the HuaweiTSMC chip controversy. A teardown revealed a TSMC-made chipset in one of Huawei’s AI products. It led to a huge investigation to find the lawbreaker and shut all the backdoors that aid the Chinese OEM.

As per the government postings, the US has blacklisted many Chinese firms like Zhipu AI, Sophgo, and others over Huawei chip concerns. The entity list includes around 25 China-based companies and two Singapore enterprises.

Zhipu AI is an LLM (large language model) developer. The Chinese company specializes in artificial intelligence and is considered the third-largest LLM maker in China’s AI industry, as of 2024. It is suspected of helping China’s military sector.

Sophgo on the other hand is said to have ordered TSMC-made components and supplied them to Huawei. Even though the company has denied any ties with the Kirin developer, the US authorities banned it and blocked tech access to it.

These companies can’t access any foreign goods, chipmaking tools, or other technology. Blacklisted firms require a license for tech exports which is usually denied.

Major Impact?

Responding to the US authorities’ current move, Zhipu said on WeChat that the Commerce Department ban decision lacks a “factual basis”. Although it won’t have any major effect on Zhipu’s business as it already mastered the core tech of LLMs.

Apart from blacklisting Chinese companies, the US government tighten chip regulations preventing diversion to Huawei. It eventually instructed TSMC to pause certain advanced chip shipments to China as they could help its military to grow.

Samsung, Intel, and TSMC are further forced to slow down chip sales to the Chinese company. They should also investigate suppliers before sending chips to them.

One of the Commerce Department officials – Alan Estevez said:

“We are holding boundaries accountable for verifying that their chips are not being  diverted to restricted entities.”

US Chinese firms Huawei chip

US bans over two dozen Chinese firms to curb chip supply to Huawei (Image Credits: HuaweiCentral)

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