The United States government plans to blacklist Chinese company Sophgo for allegedly supplying a chip integrated into Huawei’s AI processor without authorization.

The chip, made by Taiwan Semiconductor Manufacturing Company (TSMC), prompting an investigation and suspension of shipments to Sophgo.

This month, the Commerce Department added more companies linked to Huawei’s shadow network to its restricted trade list.

Sophgo is being added to the Entity List for activities against US national security and foreign policy.

Despite Sophgo’s denial of ties with Huawei, records show it supplies AI chips to Chinese universities, governments, and agencies, including those enhancing surveillance technology.