THE ESSENTIALS IN 30 SECONDS

  • According to The Information, smugglers mount HBM next to low-end server processors so the package is classed as a processor rather than controlled memory.
  • In China, technicians reportedly melt the solder, recover the memory stacks and discard the processors; the recovered HBM mostly goes to Huawei's customers.
  • A broker cited in the report says an HBM3E unit now fetches about $4,000, versus a few hundred dollars a year ago; SK hynix says it complies with export controls.

High-bandwidth memory (HBM) made by Samsung Electronics and SK hynix is reaching China through a packaging trick that exploits a gap in US export rules, according to a report published on November 2 by The Information. The account, picked up on November 3 by SBS News, Seoul Economic Daily and TechRadar, rests largely on anonymous brokers and people familiar with Huawei's supply chain, and gives no shipment volumes or seizure figures.

How the scheme reportedly works

HBM is the stacked memory that feeds data to AI accelerators, and exports of standalone HBM above a certain bandwidth density to China have required a US licence since a December 2024 rule. That rule, as TechRadar explains, judges a package combining memory and logic by its processing power rather than by the memory it carries.

Smugglers are said to use this by bonding HBM onto a substrate alongside deliberately weak server processors, so the product ships as a low-end chip. TechRadar, citing The Information, says packaging houses in Taiwan, South Korea and Southeast Asia do the assembly and that the parts travel via Hong Kong. Once in China, technicians heat the packages to melt the solder, pull off the memory stacks and throw the processors away. Overheating can crack or warp the stacks, so losses are high, but margins reportedly make that acceptable.

Who buys it and at what price

The recovered memory, mostly HBM3E, is said to go mainly to Huawei's customers. People familiar with Huawei's supply chain told The Information that the company has told some clients its next flagship AI chip will contain a substantial amount of Samsung and SK hynix HBM, and that customers should source memory themselves because Huawei cannot buy it directly. A broker in his 20s said one HBM3E unit now sells for about $4,000, against a few hundred dollars a year earlier. With six to eight units per accelerator, memory alone would add $24,000 to $32,000.

Responses and context

SK hynix said it complies with US and South Korean export controls and has not supplied Huawei since the 2020 US restrictions. Samsung, US authorities and the South Korean government had not commented publicly, according to TechRadar. The outlet notes that research firm SemiAnalysis described a similar route involving older HBM2E in April 2025, which suggests the method has persisted rather than emerged. Korean media point to a precedent: TSMC faced a US investigation in 2024 after one of its chips was found in a Huawei product.