Huawei Tells AI Chip Buyers to Smuggle Their Own Memory, Report Says

A single HBM3E memory unit now trades for about $4,000 in China, up from several hundred dollars a year ago — that's roughly a tenfold jump, and it's the direct result of Huawei telling customers to source their own memory for its next flagship AI chip.

The Information reports that Huawei has told some customers the Ascend 960DT will run largely on Samsung and SK Hynix high-bandwidth memory. There's a catch: US export rules bar both South Korean companies from selling HBM to China. The outlet spoke with smugglers, Huawei customers and others familiar with the supply chain. TNW has not independently verified the report.

Chinese memory makers can't produce enough HBM to fill the gap, so Huawei has effectively outsourced the problem to its buyers.

How does the smuggling route work?

The loophole sits in how US rules judge a chip package. Exports of standalone HBM are banned, but a package is classified by its processor, not the memory attached to it. That's the gap.

According to the report, the route works like this:

• A smuggler runs a chip design firm producing processors too weak for any data centre to buy.
• Packaging firms in Taiwan, South Korea and Southeast Asia bond Samsung and SK Hynix memory to those processors.
• The packages ship to Hong Kong under the processor's export code.
• Couriers and commuters carry them into mainland China in luggage and car boots.

At the destination, workshops heat the packages until the solder softens, then technicians lift off the memory and discard the processors. Many memory stacks crack or warp along the way — the report gives no failure-rate figures.

"A year ago, a single HBM3E unit changed hands in China for several hundred dollars. Today it's about $4,000," a chip broker in Shenzhen told The Information.

What do the suppliers and the rules say?

The full scale of the smuggling remains unclear. Samsung and SK Hynix both told The Information they comply with export rules, and SK Hynix said it has not supplied Huawei since 2020.

The regulatory gap dates to the December 2024 US rule that first restricted HBM sales to China, as TechRadar reported. That rule judges a package by its processing performance when processing is its main function. TechRadar urged caution on the claims: "The report leans heavily on anonymous dealers, with no shipment volumes, seizures, company names, or failure-rate figures attached."

For context on the supply side, China's domestic memory maker CXMT has started producing HBM3E, but Reuters reported in October that its yields are low. SK Hynix, meanwhile, expects the global memory shortage to persist until 2030.

Does this fit a broader pattern?

Yes. US prosecutors are actively pursuing AI chip smuggling cases. In October, they charged a California man with smuggling AI servers to China.

For practitioners, the takeaway is straightforward: if you're building Ascend-based systems, budget for memory that costs as much as a decent workstation per unit — and don't expect the grey market to get cheaper while CXMT ramps yields and the export rules stay as written.