High Bandwidth Memory
At current black-market rates, brokers generate $24,000 to $32,000 for the memory bundle needed to run a single AI graphics processing unit (GPU). A memory smuggler has reportedly revealed how export-controlled High Bandwidth Memory (HBM) manufactured in South Korea by Samsung and SK Hynix reaches mainland China.
Advanced memory chips barred under strict export controls are slipping across borders directly into Chinese artificial intelligence (AI) laboratories, guided by a regulatory blind spot in international trade rules, a report has said. Under current US and South Korean trade restrictions, standalone exports of cutting-edge HBM units to China are outright prohibited. Yet the smuggler, who runs a chip design venture, identified an easy detour around the embargo, The Information reports. Transporting the hardware into mainland China involves a delicate process. Firstly, the low-end boards with top-tier memory first arrive in Hong Kong. From there, daily commuters carry the hardware inside personal luggage across the border into Shenzhen. Once inside Shenzhen, the hardware is taken to local workshops. Technicians heat the circuit boards to soften the solder, carefully pry off the valuable HBM units and throw away the cheap processors and host boards. Even though melting and lifting memory off boards carries a high failure rate, the surging street value of functional HBM units makes the risky operation profitable. The black market for advanced memory has expanded rapidly alongside China’s push to train competitive AI models. A Shenzhen-based broker facilitating transactions between smugglers and hardware-starved domestic tech firms noted that street prices have reached historic highs. Modern AI accelerators require between six and eight high-end memory units to operate.