The U.S. government will add Sophgo, a Chinese tech company, to the Department of Commerce's Entity List for being an intermediary between blacklisted Huawei and TSMC, reports Reuters. For Sophgo, being placed on the Entity List means that it will no longer be able to procure advanced chips, effectively signaling the end of its operations. On the other hand, Huawei will likely try to find other intermediaries to place orders for different chips from TSMC.
Since September 2020, Huawei has been unable to legally purchase chips made using American technologies (i.e., virtually all chips). Sophgo violated U.S. export rules, and the U.S. Commerce Department is therefore expected to add it to its Bureau of Industry and Security's Entity List. Companies on the Entity List face stringent export restrictions, requiring a license for shipments, which are usually denied. As a result, Sophgo will be unable to place its orders with TSMC or buy chips outside of China, spelling the end for the company.
