AI chip smugglers exploit trade control loophole to bring banned HBM from South Korea into China — expensive memory chips packaged with cheap, unsanctioned processors to become legal exports

Memory smugglers are bypassing export controls by packaging banned South Korean HBM chips with cheap, low-performing server processors that fall outside trade restrictions. Once smuggled into China via Hong Kong and Shenzhen, the expensive memory chips are harvested for high-profit resale to AI labs facing severe bottlenecks. Although the operation is lucrative, smugglers fear imminent enforcement crackdowns by authorities in the United States, South Korea, and other regions. Open article →