Major loopholes in US controls! US media reveals new smuggling methods, Korean-made HBM flows into Huawei in large quantities

Although the United States has implemented controls on the export of advanced semiconductors to China, the American technology media "The Information" reported on the 2nd that high-bandwidth memories (HBM) produced by South Korea's Samsung Electronics and SK Hynix are still being smuggled into China in large quantities. Smugglers package HBM with low-end server processors to circumvent export controls, and then disassemble the memory after the products arrive in China.

Reports indicate that smugglers package HBM and low-end server processors on circuit boards and then export them to China. The loophole they exploited is that exporting HBM alone is subject to U.S. export controls, but when it is packaged with a server processor, it is classified as a server processor product.

Under U.S. export regulations, the computing power of semiconductor packages is evaluated based on server processors, not memory. When the packaged products arrive in China, they will be disassembled. Chinese technicians first heated the circuit board to soften the solder, then removed the memory and discarded the remaining processor.

The entire disassembly process requires exquisite skills. Heating too fast or for too long may cause the memory to deform or crack. Therefore, the failure rate is quite high. However, because of the huge profits, smuggling is rampant.

A broker in his 20s who handles HBM smuggling in China revealed that the price of an HBM3E has soared to US$4,000 recently, while the transaction price a year ago was only a few hundred US dollars. An AI accelerator requires 6 to 8 HBMs, and the memory cost alone is between US$24,000 and US$32,000. This does not include the cost of the AI ​​processor, server, and power supply system.

According to reports, HBM obtained in this way mainly sells Huawei. Sources familiar with Huawei's supply chain revealed that Huawei recently explained to some customers that its next-generation flagship AI chip, Ascend 960DT, mainly uses HBM produced by Samsung Electronics and SK Hynix. Huawei pointed out that the Ascend 960DT is twice as powerful as existing chips and is the most powerful processor made in China.

Because it is difficult to purchase the required memory directly from Korean manufacturers, Huawei even recommends that some AI chip customers obtain HBM themselves. HBM, which can quickly transmit large amounts of data, is a core component that improves the processing performance of AI processors. Without enough HBM, even if a high-performance AI chip is developed, it will be difficult to fully demonstrate its performance. Samsung Electronics and SK Hynix account for more than 80% of the global HBM market.

Reports say smugglers often view related transactions as a patriotic act. A Chinese broker in his 20s who smuggles memories said he did not consider himself engaged in smuggling. He said his work "is making a contribution to the motherland."