Introduction
In a bold move to circumvent U.S. export restrictions, Huawei has reportedly used shell companies to secure over 2 million AI chips dies manufactured by Taiwan’s TSMC (Taiwan Semiconductor Manufacturing Company).
This development, uncovered by the Center for Strategic and International Studies (CSIS), highlights how Huawei continues to sidestep international trade controls and keep its AI ambitions alive despite growing global pressure.
“A shell company is a business entity that exists only on paper and has no significant operations, employees, or assets. These companies are often used for legal purposes such as holding assets, tax planning, or facilitating mergers and acquisitions“
https://www.yolegroup.com/product/report/overview-of-the-semiconductor-devices-industry-h1-2025
Overview
U.S. export controls under scrutiny – The incident raises concerns about the effectiveness of trade restrictions, as Huawei continues to find ways to secure advanced semiconductors.
Huawei secures 2 million AI chips – A CSIS report reveals that Huawei acquired TSMC-manufactured Ascend 910B dies through shell companies, bypassing U.S. export restrictions.
Potential for 1 million AI processors – The chips could support the production of 1 million Ascend 910C processors, crucial for AI applications.
Shell companies facilitate transactions – Huawei-linked intermediaries reportedly placed orders with TSMC, allowing the chips to reach China despite sanctions.
Impact on China’s AI race – The DeepSeek AI model and other Chinese AI advancements may have benefited from this secretive chip stockpile.
A Strategic Acquisition Amid U.S. Sanctions
According to a report from CSIS, TSMC produced over 2 million Ascend 910B logic dies for Huawei, which have now been stockpiled by the Chinese tech giant.
This quantity is significant because the Ascend 910C processor is constructed by combining two Ascend 910B dies, along with high-bandwidth memory (HBM).
With this stockpile, Huawei could potentially manufacture 1 million Ascend 910C processors.
This move comes after years of escalating U.S. export controls, which have severely restricted Huawei’s access to advanced semiconductor technologies.
In 2020, the U.S. government placed Huawei on a Entity List, effectively blocking the company from sourcing chips and components from TSMC, the world’s largest contract chipmaker.
The U.S. tightened restrictions further in 2022 and 2023, which only increased the pressure on Huawei to find alternative ways to obtain crucial semiconductor technologies.
techovedas.com/huaweis-ascend-910c-ai-chip-to-challenge-nvidia-with-2025-mass-production-launch
The Role of Shell Companies
Despite these efforts, Huawei reportedly found a way around these controls by relying on shell companies—intermediary entities that could legally place orders for chips with TSMC on Huawei’s behalf.
According to CSIS, Huawei-linked shell companies are said to have played a central role in obtaining and transferring these chips back to China, bypassing U.S. sanctions.
This tactic raises significant questions about the effectiveness of U.S. export controls and whether other Chinese tech firms might use similar strategies to sidestep international trade restrictions.
This strategy is not new for Huawei. Over the years, the company has faced numerous obstacles in accessing the most advanced semiconductor technologies.
However, Huawei’s ability to exploit loopholes in the global trade system shows the determination of Chinese companies to stay competitive in the fast-paced AI sector.
techovedas.com/is-tsmc-supplying-chips-to-huawei-us-commerce-department-launches-investigation
How Huawei’s Stockpile Could Affect the AI Race
The Ascend 910C processor, powered by TSMC’s chips, is central to Huawei’s ambitions in the artificial intelligence (AI) sector.
The Ascend series of chips powers data centers, autonomous vehicles, and AI-driven applications.
With the global AI race intensifying, companies like Huawei are working tirelessly to develop cutting-edge technologies that can power next-generation AI systems.
In recent months, Huawei has been working on enhancing its AI model DeepSeek, which has gained significant attention for its capabilities.
According to CSIS, Huawei’s DeepSeek AI model would not have been possible without this stockpile of chips.
The report points out that U.S. export controls, which restricted Chinese access to advanced semiconductors, flawed as they were, were not enough to stop Huawei from advancing in the AI space.
The Significance of This Development
Huawei acquisition of 2 million AI chips from TSMC underscores the growing complexity of global trade controls in the technology sector.
Despite the U.S.’s efforts to restrict China’s access to cutting-edge semiconductor technologies, Huawei’s maneuvering indicates that there are still ways for the Chinese tech giant to maintain its position in the global race for AI dominance.
Huawei’s stockpile of AI chips not only enhances its own capabilities but also sends a message to the international community.
It shows that sanctions may not be the ultimate barrier to technological innovation. Given the high demand for AI components, Chinese companies will likely continue to find ways to circumvent U.S. export controls.
The Implications for the Global Semiconductor Industry
The implications of this move could have far-reaching effects on the global semiconductor industry.
As one of the leading producers of AI chips and advanced memory components, TSMC could face increased pressure from both the U.S. government and China.
If Huawei is successfully able to exploit these loopholes, it could prompt a rethink of U.S. policy, especially regarding its ability to control the flow of cutting-edge semiconductor technology.
Moreover, if Huawei continues to secure advanced chips from TSMC or other global chipmakers like Samsung, it may be able to develop even more powerful AI models.
This would give the company a substantial competitive edge over rivals in the U.S. and other parts of the world.
Conclusion: A New Chapter in the Semiconductor Saga
Huawei acquisition of over 2 million AI chips and its efforts to bypass U.S. export controls show the challenges in the semiconductor industry. Despite restrictions, Huawei’s stockpile keeps it competitive in AI development.
As the AI race heats up and China-U.S. tensions grow, chipmakers must navigate sanctions, trade rules, and supply chain risks. Huawei’s ability to adapt proves that the fight for AI dominance is far from over.
This battle over trade, tech, and geopolitics will shape the future of semiconductors and AI, with Huawei’s strategies setting an example for others.
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