Huawei asked specific clients to procure their own high-bandwidth memory for the upcoming Ascend 960DT processor, The Next Web reports. US export controls prevent South Korean firms from selling this hardware directly to buyers in China, leading to underground supply chains.
Key takeaways
- Huawei instructed certain customers to source their own memory components.
- US regulations ban direct high-bandwidth memory sales to China.
- Smugglers attach restricted memory to weak processors to bypass customs.
- Prices for a single memory unit climbed to about $4,000 in China.
How does huawei hbm smuggling work?
According to The Next Web, a smuggler operating a chip design firm creates weak processors that data centres ignore. Packaging companies in South Korea, Taiwan, and Southeast Asia bond Samsung and SK Hynix memory onto these weak units. Shipments then move to Hong Kong using the processor export code before couriers transport them into mainland China via luggage and car boots.
Workshops inside China heat these imported packages until the solder softens so technicians can remove the memory and discard the processors. A broker in Shenzhen told the publication that a single memory unit now costs about $4,000, up from several hundred dollars a year prior.
What are the rules and market reactions?
US export restrictions from December 2024 judge chip packages by their processing capability rather than attached memory. Both Samsung and SK Hynix stated they follow all trade rules, while SK Hynix added it has not supplied Huawei since 2020. Reuters noted in October that domestic producer CXMT has begun manufacturing memory with low yields, and SK Hynix anticipates global shortages extending to 2030.
What happens next?
Federal prosecutors continue targeting illegal shipments, having charged a California man in October for smuggling servers to China. While the full extent of this underground trade remains unclear, TechRadar pointed out that the original report relies heavily on anonymous dealers without official shipment volumes or seizure figures. Affected buyers must navigate these high costs and regulatory gaps independently.
Frequently asked questions
Huawei instructed certain clients to source their own high-bandwidth memory for its upcoming Ascend 960DT processor.
US export rules bar companies like Samsung and SK Hynix from selling high-bandwidth memory directly to buyers in China.
Smugglers attach restricted memory to weak processors and ship the packages to Hong Kong before couriers carry them into mainland China.
A single memory unit that cost several hundred dollars a year ago now sells for about $4,000 in China.
Both Samsung and SK Hynix stated they comply with all export rules, and SK Hynix noted it has not supplied Huawei since 2020.
Based on reporting by The Next Web. Read the original article
