Business · Trade · 7 hrs ago
Smugglers reportedly move high-end memory into China with low-end processors
Smugglers are reportedly sending high-end memory into China attached to deliberately weak processors.
The memory is made by Samsung and SK hynix, and the shipments reportedly pass through Hong Kong before reaching mainland China.
Workshops in China heat the packages, remove the memory and discard the processors.
The memory stacks sell for about $4,000 each, with much of the supply reportedly going to Huawei customers.
The method exploits a US export rule that treats some memory-and-processor packages according to the processor’s performance, rather than controlling the memory on its own.
A weak processor can make a package appear eligible for export, even when the memory is the valuable part.
The rule says the package must mainly function as a processor, but no regulatory response or next step is reported.
Smugglers are reportedly exporting high-bandwidth memory to China attached to low-performance processors, so the packages can be declared as ordinary processors.
Workshops in mainland China reportedly heat the packages, remove the memory stacks and discard the processors.
The memory is made by Samsung and SK hynix and is reportedly sold for about $4,000 per stack, mostly to Huawei customers.
The scheme exploits a December 2024 US export-rule exclusion for some co-packaged chips, which are assessed by processing performance.
- Who
- Smugglers reportedly pair memory made by Samsung and SK hynix with low-performance processors. The article describes a man in his 40s, fluent in Chinese and Korean, as central to the scheme.
- What
- High-bandwidth memory is reportedly attached to low-performance processors and smuggled into China, where it is removed and sold.
- When
- The article was published on November 3, 2026. It says the relevant US rule was published in December 2024.
- Where
- Packages are reportedly assembled in Taiwan, South Korea and Southeast Asia, shipped to Hong Kong, then taken into mainland China.
- Why
- The co-packaging exclusion reportedly allows packages to be assessed by processing performance, enabling HBM paired with slow processors to be declared as a low-end chip.
This story does not have two clearly opposing sides.
The US Bureau of Industry and Security published rules requiring a license for certain standalone HBM exports to China, with an exclusion for some co-packaged chips.
Packages reportedly ship to Hong Kong declared as processors, then cross into mainland China.
Workshops reportedly heat the packages, remove the HBM stacks and discard the processors.
- HBM makers
- Samsung and SK hynix
- Reported sale price
- About $4,000 per stack
- Rule date
- December 2024
- Reported route
- Taiwan, South Korea and Southeast Asia to Hong Kong, then mainland China
- Reported buyers
- Mostly Huawei customers
What people are saying
clunky
compliant export
where the dominant function of the co-packaged integrated circuit is processing