Huawei Passes HBM Purchase to Clients as Prices Soar

Huawei is struggling to secure enough HBM memory for its AI chips and is advising some customers to source it directly, according to a source. At the same time, parallel circuits via Hong Kong are pushing the price to around $4,000 per unit, with up to $32,000 worth of memory per chip. South Korean customs report $560 million in trade violations related to illicit exports. Huawei is preparing the Ascend 960DT for early next year and claims a doubling of performance.

Smuggled HBM Reaches $4,000, Up to $32,000 Per Chip

According to a broker based in Shenzhen, the unit price of illegally obtained HBM3E has surged over the past year from a few hundred dollars to around $4,000. At this price, and with the need for six to eight modules per AI chip, the total cost of memory alone can rise to $32,000. The parallel supply does not only come from organized smuggling: older Nvidia GPUs, dismantled for their parts, and surplus inventory from chip designers also feed this market. South Korean authorities reported $560 million in trade violations by May, a total already exceeding the previous annual record, with one-third related to strategic goods such as chips exported without authorization or with false declarations. South Korea is reporting record levels of illegal chip exports.

Channels via Hong Kong Dismantle Memory from Below-Threshold Batches

Networks are exploiting a loophole in U.S. regulations by pairing HBM memory with underperforming server processors, below export thresholds, and then shipping these sets to China via Hong Kong. Once they arrive, workshops separate the memory chips from the processors. This operation is described as fragile, with a high error rate, but the margins generated encourage these practices. A sophisticated smuggling network has thus developed to supply the market.

Supply Blockages and Strategy Announced by Huawei

Huawei is unable to obtain enough HBM memory, and its Chinese suppliers are not producing enough. U.S. export rules further prevent direct purchases of HBM from Samsung and SK Hynix, which together control over 80% of the global market. Huawei has informed some of its customers that they must acquire the necessary memory for its AI chips themselves, according to a source. The company is announcing the launch of the Ascend 960DT for early next year, assuring that this chip could offer double the performance compared to its current models. These obstacles arise as the company is subject to U.S. sanctions and faces supply difficulties.