16:11Machine-translated from Azerbaijani by AIRead in Azerbaijani
Smugglers Attach HBM Memory to Low-Performance Server Processors and Move It Into China
Brokers circumventing export restrictions on China are transporting banned HBM memory chips from South Korea. HBM is a type of memory that transfers data extremely quickly and helps artificial intelligence processors perform calculations faster. A company owned by the person who devised the scheme makes inexpensive, low-performance server processors.
Expensive HBM modules made by “Samsung” and “SK hynix” are attached to these processors. HBM cannot be exported separately to China. However, during inspections, only the server processor's performance in the complete device is taken into account. The memory packaged with a low-performance processor is therefore shipped out of South Korea as a legal product and initially sent to Hong Kong. The circuit boards that reach Hong Kong are carried to Shenzhen in the luggage of passengers who cross the border every day. At workshops, the boards are heated to soften the solder. Technicians carefully remove the HBM chips and discard the remaining parts of the boards. Many chips become unusable during the process. Nevertheless, rising memory prices keep the operation profitable. In China, 1 HBM3E module sells for $4,000. That is 6,800 manat. A single AI GPU performing artificial intelligence calculations requires 6-8 such memory chips. At the low end, the modules' total sale price reaches $24,000 (40,800 manat). At the high end, it is $32,000 (54,400 manat). One of the main problems facing Chinese artificial intelligence laboratories is finding enough HBM memory. “CXMT” has begun trial production of HBM3E chips and plans to move to mass production by the end of 2026. However, the share of usable chips produced remains low. This increases the production cost of domestic memory, and output cannot fully meet market demand. The memory shortage is also affecting “Huawei” products. The company's current most powerful model, the “Ascend 950DT,” sells for $37,000 (62,900 manat). Its price is approximately the same as the “Nvidia B200,” but its performance is about half that of the previous-generation “Nvidia H100.” “Huawei” has said that its next “Ascend 960DT” model will reach the “H100” level. Nevertheless, customers must find the HBM memory needed for the servers themselves. This situation further increases demand for HBM and smugglers' potential profits. The US has arrested senior officials in connection with similar operations, including “Super Micro” executives and the CEO of a California-based technology company. Taiwan and Malaysia have already tightened controls against chip smuggling. South Korea and the US are also expected to close the loophole used in this scheme.
Expensive HBM modules made by “Samsung” and “SK hynix” are attached to these processors. HBM cannot be exported separately to China. However, during inspections, only the server processor's performance in the complete device is taken into account. The memory packaged with a low-performance processor is therefore shipped out of South Korea as a legal product and initially sent to Hong Kong. The circuit boards that reach Hong Kong are carried to Shenzhen in the luggage of passengers who cross the border every day. At workshops, the boards are heated to soften the solder. Technicians carefully remove the HBM chips and discard the remaining parts of the boards. Many chips become unusable during the process. Nevertheless, rising memory prices keep the operation profitable. In China, 1 HBM3E module sells for $4,000. That is 6,800 manat. A single AI GPU performing artificial intelligence calculations requires 6-8 such memory chips. At the low end, the modules' total sale price reaches $24,000 (40,800 manat). At the high end, it is $32,000 (54,400 manat). One of the main problems facing Chinese artificial intelligence laboratories is finding enough HBM memory. “CXMT” has begun trial production of HBM3E chips and plans to move to mass production by the end of 2026. However, the share of usable chips produced remains low. This increases the production cost of domestic memory, and output cannot fully meet market demand. The memory shortage is also affecting “Huawei” products. The company's current most powerful model, the “Ascend 950DT,” sells for $37,000 (62,900 manat). Its price is approximately the same as the “Nvidia B200,” but its performance is about half that of the previous-generation “Nvidia H100.” “Huawei” has said that its next “Ascend 960DT” model will reach the “H100” level. Nevertheless, customers must find the HBM memory needed for the servers themselves. This situation further increases demand for HBM and smugglers' potential profits. The US has arrested senior officials in connection with similar operations, including “Super Micro” executives and the CEO of a California-based technology company. Taiwan and Malaysia have already tightened controls against chip smuggling. South Korea and the US are also expected to close the loophole used in this scheme.