--- title: "HBM3E Smuggling into China: Expensive Memory Soldered onto Cheap Chips to Bypass Export Restrictions" description: "Expensive HBM3E memory is being smuggled into China from South Korea and installed on cheap chips to bypass export restrictions. The price of a single microchip on the local market has reached $4,000." date: 2026-11-04T02:11:09.382Z lang: en url: https://xab.info/en/posts/hbm3e-smuggling-into-china-expensive-memory-cheap-chips tags: [hbm3e, china, smuggling, ai-hardware, export-controls, samsung, sk-hynix, huawei] author: "Alexander Buran" publisher: "XAB.info" --- # HBM3E Smuggling into China: Expensive Memory Soldered onto Cheap Chips to Bypass Export Restrictions ![A cutaway model of a multilayer HBM memory chip on a substrate labeled Core Die and Substrate](https://xab.info/media/2026/11/04/kontrabanda-hbm3e-v-kitay-dorozhaya-pamyat-na-deshyovyh-chipah/kontrabanda-hbm3e-v-kitay-dorozhaya-pamyat-na-deshyovyh-chipah-1.webp) ## Key Points - China has established an HBM3E smuggling pipeline from South Korea via Hong Kong and Shenzhen, exploiting loopholes in US and South Korean export rules. - Expensive memory from Samsung and SK hynix is mounted on cheap chips and later extracted in workshops despite the risk of damage. - The price of a single HBM3E microchip on the local market has reached $4,000; a single AI accelerator uses 6–8 chips worth about $32,000. - Domestic production (CXMT) cannot close the deficit yet due to low yields, and Huawei cannot supply memory for the Ascend 960DT. - The US is investigating such supplies, while Taiwan and Malaysia are tightening controls, increasing risks for smugglers. A steady shadow supply chain for high-speed HBM memory from South Korea has formed in China, allowing intermediaries to bypass current export restrictions. According to The Information, the scheme's organizers exploit a loophole in US and South Korean regulations: export quotas account for processor specifications without considering the memory installed on them. As a result, expensive HBM from Samsung and SK hynix is attached to cheap chips, after which the finished boards are smuggled through Hong Kong to Shenzhen. On the local market, the price of a single HBM3E microchip has already reached $4,000, driven by an acute shortage of memory for AI accelerators. ### How the Circumvention Scheme Works The key smuggling mechanism relies on the formal compliance of export declarations: since restrictions are tied to the processor's parameters rather than the memory mounted on it, boards with cheap chips and expensive HBM pass inspection as "authorized" products. Once smuggled through Hong Kong into Shenzhen, they end up in specialized workshops where the chips are heated to extract the memory modules while the remaining components are discarded. Despite the real risk of microchip damage from thermal exposure, the scheme remains economically viable: a single AI accelerator requires six to eight HBM3E chips with a total value of about $32,000, making even partial losses acceptable to smugglers. ### Why Domestic Production Cannot Close the Deficit Yet China's domestic efforts to meet memory demand have not yet resolved the issue. Chinese manufacturer CXMT is preparing to launch mass production of HBM3E, but it faces low chip yield rates, which limits actual volumes. Meanwhile, Huawei has warned buyers of future AI servers that they will have to source memory for the new Ascend 960DT accelerator on their own, as the company cannot purchase it from Samsung and SK hynix. Thus, even major domestic players are forced to rely on shadow channels, further driving up prices and demand on the black market. ### Risks of Stricter Control Growing demand for AI hardware could make smuggling even more lucrative, yet the scheme's participants fear tightened oversight. The US is already investigating such shipments, and Taiwan and Malaysia are taking additional measures against smugglers. Under these conditions, the shadow HBM3E market remains in a high-risk zone: any tightening of border and customs control could sharply narrow smuggling channels and push prices even higher for the memory without which deploying modern AI accelerators is impossible. ## Fact-Check & Sources - [Дорогую HBM3E стали устанавливать на дешёвые процессоры ради контрабанды в Китай window-new](https://3dnews.ru/1150809/doroguyu-hbm3e-stali-ustanavlivat-na-deshyovie-protsessori-radi-kontrabandi-v-kitay) - The primary source retells The Information's investigation: export rule loophole, Hong Kong-Shenzhen route, workshop memory extraction, $4,000 per chip, 6-8 chips per accelerator (~$32,000), CXMT yield issues, Huawei's Ascend 960DT warning, US investigation, and Taiwan/Malaysia measures. All figures and claims are drawn from the article's foundation. ## FAQ ### How exactly are HBM export restrictions bypassed? According to The Information, US and South Korean restrictions account for processor specs without installed memory. Therefore, expensive HBM from Samsung and SK hynix is attached to cheap chips, and such boards formally pass as authorized before being smuggled through Hong Kong to Shenzhen. ### How much does HBM3E cost on the Chinese market? The price of a single HBM3E microchip on the local market has reached $4,000. A single AI accelerator requires six to eight chips with a total value of approximately $32,000. ### Why isn't China covering the deficit with domestic production? CXMT is preparing for mass production of HBM3E, but faces low microchip yields. Huawei has also warned that buyers will have to find memory for the Ascend 960DT accelerator themselves, as the company cannot purchase it from Samsung and SK hynix. ### What risks do participants in the scheme face? Participants fear increased enforcement: the US is already investigating such supplies, and Taiwan and Malaysia are taking extra measures against smugglers. Additionally, extracting memory in workshops carries the risk of damaging the microchips.