Chip Traders Move South Korean AI Memory Into China Through Server Packages

Chip traders describe moving South Korean high-bandwidth memory (HBM) into China inside packages built around lower-powered server processors, using a potential gap in U.S. export controls as Huawei prepares its next AI chip.

The traders attach HBM made by Samsung Electronics and SK hynix to processors below the relevant performance threshold. They declare the assembled packages under the processors’ classification and ship them through Hong Kong. From there, shipments enter mainland China, where the memory is removed for resale.

Removing the memory requires heating the package to soften its solder. The process can warp or crack the memory. The route uses the processor as a temporary carrier: after removal, the memory can be sold separately, while the lower-powered processor no longer serves its purpose in the shipment.

U.S. controls on advanced HBM exports to China took effect in December 2024. A package containing both a processor and memory can be classified by the processor’s performance, even when the attached memory is advanced. That distinction creates an opening for traders seeking to move HBM into China.

A Shenzhen chip broker quoted about $4,000 for one HBM3E unit, compared with several hundred dollars a year earlier. At that quoted price, six to eight units for a finished AI chip package would cost $24,000 to $32,000 for memory alone. That calculation concerns the finished AI chip, rather than the lower-powered processor package used for shipment.

Two people familiar with Huawei’s supply chain said the company has told some customers that its planned Ascend 960DT will rely heavily on memory from Samsung Electronics and SK hynix. They said Huawei asked some chip buyers to obtain the memory themselves. Their account does not establish that either manufacturer supplied Huawei directly. SK hynix said it has not supplied Huawei since U.S. restrictions took effect in 2020.

South Korea recorded 770.3 billion won in trade security violations through May 2026, exceeding the 655.6 billion won recorded for all of 2025. Strategic-goods cases accounted for 243 billion won, about a third of the 2026 total by value. Those figures cover many types of goods and do not identify an HBM smuggling total or tie the cases to this packaging route.

Huawei says the Ascend 960DT will be available in the first quarter of 2027.