NuAxiSemiconductor trade intelligence

[News] China Reportedly Obtains Smuggled HBM via Server Packages; Huawei 960DT Faces Domestic HBM Shortage

What happened

According to The Information, citing sources, while U.S. export restrictions limit China's access to advanced high-bandwidth memory (HBM), smugglers have been exploiting a loophole by packaging HBM chips with lower-performance server processors, taking advantage of rules that assess the packages' computing power based on the processors rather than the memory. Once the packages reach China, technicians heat them to soften the solder before removing the HBM stacks and discarding the processors; the delicate process carries a high risk of damaging the memory, but potential profits make it worthwhile. The smuggled memory reportedly often ends up with customers of Huawei Technologies. Huawei's next-generation Ascend 960DT AI accelerator, expected in the first quarter of 2027, is set to double the memory bandwidth and capacity of Huawei's current AI processor and is expected to rely heavily on HBM from Samsung Electronics and SK hynix; Huawei has reportedly asked some AI chip customers to source the memory themselves, and is working with DeepSeek to optimize the chip for AI model pre-training, a task for which DeepSeek previously relied exclusively on NVIDIA chips. On the domestic supply side, U.S.-sanctioned Fujian Jinhua Integrated Circuit trails its South Korean competitors technologically and lacks capacity to meet Huawei's customer demand, per the report; Reuters, citing sources, reports CXMT's HBM3E yields remain at just 20%–30%, well below the approximately 70% achieved by SK hynix. HBM shortages are pushing up prices: Huawei recently told some customers it was raising the suggested price of its most powerful AI chip, the Ascend 950DT, to more than RMB 250,000 (approximately US$37,000) amid high memory costs and tight supply; the 950DT delivers roughly half the raw computing performance of NVIDIA's H100 (launched in 2022) but now costs as much as the B200, which began shipping last year. Reuters, citing sources, reports Cambricon has raised indicative pricing for its next-generation 690 chip by 20%–30%, with MetaX and Iluvatar CoreX reportedly making similar increases. Separately, the Financial Times, citing sources, reports NVIDIA has told cloud computing customers that at least 51% of their services must be sold to non-Chinese companies.