HBM Smuggling to China Reportedly Hits $4,000 per HBM3E Unit for Huawei

Smugglers are reportedly moving Samsung and SK hynix high-bandwidth memory (HBM) into China by packaging it with low-end server processors, with a single HBM3E unit now fetching about $4,000, The Information reported on Nov. 2.

BusinessKorea, Seoul Economic Daily and TrendForce all relayed the report on Nov. 3, and none of them could confirm it independently. The Information cited a broker in his 20s, who said an HBM3E unit sold for several hundred dollars a year ago. One AI chip package needs six to eight HBM units, so the memory alone adds $24,000 to $32,000 before the processor, server and power costs, according to the broker as quoted by BusinessKorea.

How the packaging loophole works

Under US export rules, a package's computing power is assessed on its server processor, not on the memory, according to The Information as relayed by BusinessKorea. Exporting HBM alone is restricted, so smugglers mount it on a board with a cheap server processor and ship the whole assembly as a processor product. In China, technicians heat the board to melt the solder, pry off the HBM and discard the processor. Seoul Economic Daily said the work is delicate: heat applied too fast or too long warps or cracks the memory stacks, so failure rates are high.

Why Huawei's customers want it

The HBM mostly reaches customers of Huawei, according to people familiar with its supply chain cited by The Information. TrendForce reported that Huawei expects its Ascend 960DT, due in the first quarter of 2027, to rely heavily on HBM from Samsung and SK hynix and to double the memory bandwidth and capacity of its current processor. Because Huawei cannot buy from the Korean makers directly, it has reportedly told some customers to source the memory themselves.

Domestic supply does not fill the gap, TrendForce said, citing The Information. Fujian Jinhua, a US-sanctioned memory maker, lacks the capacity, and CXMT's HBM3E yields sit at 20% to 30%, Reuters reported, against about 70% at SK hynix, as Voltgrid reported on Oct. 28. TrendForce also reported that Huawei told some customers it is raising the suggested price of the Ascend 950DT to more than RMB 250,000, about $37,000, citing high memory costs and tight supply.

For AI operators outside China, the effect is on allocation. Samsung and SK hynix together hold more than 80% of the HBM market, according to Seoul Economic Daily, and Samsung has said its 2027 supply is sold out. Any tightening of export enforcement or scrutiny of Korean suppliers would bear on the same scarce stacks.

What is not confirmed yet

SK hynix said it complies with US and Korean export controls and has not supplied products to Huawei since Washington imposed restrictions in 2020, per Seoul Economic Daily. The reports we read carry no Samsung comment and do not show that either maker shipped to Huawei or to the smugglers. They give no total volume, route or company names, and no reaction from US authorities. Seoul Economic Daily noted that TSMC faced a US investigation in 2024 after one of its chips turned up in a Huawei product, which is the risk the two Korean suppliers now face if their memory is found in Chinese AI chips.