THE CRUNCH
Some Huawei customers are being left to buy the memory for its AI chips on their own, a shift that The Information reports is effectively steering buyers into the black market. Chinese suppliers cannot make enough High-Bandwidth Memory (HBM), and US export rules mean Samsung and SK Hynix, which together hold more than 80 percent of the global market, cannot sell to Huawei directly.
Smugglers have filled the gap by packing HBM alongside cheap server processors whose performance sits under the export threshold, then routing the consignments to China via Hong Kong. Once the packages arrive, workshops prise the memory chips out. The work is error-prone and unreliable, yet the profits justify the trouble.
A broker in Shenzhen said smuggled HBM3E has climbed from a few hundred dollars to roughly $4,000 per unit within a year. With each AI chip requiring six to eight units, memory alone can run to $32,000.
Contraband is not the only supply: older Nvidia GPUs are being pulled apart for components, and surplus stock from chip designers that abandoned projects or trimmed orders adds to the pool. By May, South Korea's customs authority had already recorded $560 million in trade violations, topping the previous full-year record; about a third of that involved strategic goods such as chips shipped without authorisation or with false declarations.
Huawei, meanwhile, intends to bring out the Ascend 960DT early next year, claiming it will perform twice as well as its existing chips.