AI chip smugglers exploit export loopholes to move banned HBM to China

Samsung and SK hynix memory is reportedly being bundled with low-end processors, shipped through Hong Kong, then stripped out in Chinese workshops US export controls were built to keep China away from the most advanced AI hardware. Smugglers appear to have found a way around them, and the trick involves cheap server chips and a soldering station. According to a report from Tom’s Hardware, high-bandwidth memory (HBM) made by Samsung Electronics and SK hynix is being repackaged alongside low-end server processors and shipped toward China. The processor is bait. The memory is the prize. How the repackaging scheme works The smuggling method reportedly starts by mounting the high-performance HBM on a substrate board. That board is then declared under the classification of the accompanying server processor, not the memory itself. Put simply, the paperwork describes the boring, unrestricted part of the package. The valuable, restricted part rides along unmentioned. These packages are reportedly sent from manufacturing hubs in Taiwan, South Korea and Southeast Asia to Hong Kong. From there, the trail leads into mainland China. Once the shipments arrive, illicit workshops reportedly pull th...