Huawei tells AI chip buyers to find scarce memory on the black market

Huawei is telling some customers to source the memory for its AI chips themselves, which pushes them toward the black market, The Information reports. The memory is in short supply, and the price of smuggled units has climbed fast.

Why memory is the problem

Huawei plans to launch its Ascend 960DT chip early next year and says it will double the performance of its current chips. But each chip needs High-Bandwidth Memory, or HBM. Huawei's Chinese suppliers cannot make enough of it. U.S. export rules block direct purchases from Samsung and SK Hynix, which together control over 80 percent of the global market.

How the smuggling works

Smugglers bundle HBM with cheap server processors that fall below the export threshold. They ship the packages to China through Hong Kong. Workshops there separate the memory from the processors. The process is fragile and the error rate is high, but the margins make it worth it.

• Smuggled HBM3E memory now costs about $4,000 a unit, up from a few hundred dollars a year ago.
• Each AI chip needs six to eight units, so memory alone can reach $32,000.
• Stripped older Nvidia GPUs and leftover chip designer inventory also feed the market.

What is not known yet

The report does not say how many customers Huawei has told this, or whether the launch date is at risk. South Korea's customs authority found trade violations worth $560 million by May, a record, and a third involved items like chips.