Smugglers Use Processor Loophole to Move Restricted HBM Into China

Nov 3, 2026
Smugglers are reportedly pairing restricted HBM chips with permitted processors in South Korea before moving the memory into China for removal and resale.

Smugglers are exploiting export rules to move restricted high bandwidth memory from South Korea into China, a smuggler told The Information, Tom's Hardware reports. The operation pairs HBM from Samsung Electronics and SK hynix with inexpensive processors whose performance remains below export control thresholds.

The assembled boards are shipped to Hong Kong and carried across the border into Shenzhen in travelers' luggage. Technicians then heat the boards, remove the memory chips and discard the other components. Some chips fail during removal, but their resale value can cover those losses.

The reported price of one HBM3E unit in China has risen from several hundred dollars about a year ago to roughly $4,000. An AI processor requiring six to eight units would therefore need $24,000 to $32,000 worth of black market memory.

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