Huawei tells customers to find their own AI chip memory, effectively outsourcing procurement to the black market

Why it matters

Huawei is instructing some customers to secure their own supply of High-Bandwidth Memory for its AI chips, effectively shifting procurement onto a black market that has emerged to circumvent U.S. export controls, according to a report from The Information. The company plans to launch the Ascend 960DT early next year, promising a large performance gain over its current chips, but its domestic suppliers cannot produce sufficient memory, and sanctions prevent direct purchases from Samsung and SK Hynix, which dominate the global market. Smugglers exploit a loophole by bundling the memory with low-end processors shipped through Hong Kong, where workshops separate the components despite a fragile, error-prone process. A Shenzhen broker says prices per unit have risen sharply within a single year, making memory a major cost for each chip. South Korean customs has already uncovered record levels of illegal chip-related trade this year. The story illustrates how sanctions are reshaping supply chains and pushing buyers toward gray-market workarounds.