[A Shenzhen Man in His 20s Makes a Fortune in the South Korean Chip Black Market: After 3 Years, He's Dressed in Designer Brands] Beating AI News reports that *The Information* investigated the smuggling chain of high-end South Korean memory chips and interviewed a Shenzhen distributor in his 20s. He originally worked for a chip company but leveraged his connections to enter the black market. In just three years, he's now decked out in designer brands and busy connecting buyers and sellers. The US will restrict exports of advanced HBM (High-Bandwidth Memory) to China starting in late 2024. However, the rules have a loophole: while HBM exports are restricted on their own, if packaged with a processor, the decision on whether to cross the control line may be based on the processor's computing power. A smuggler in his 40s controlled a chip design company, specializing in designing cheap, low-performance server processors. These chips, which nobody wanted, became a front for purchasing high-end South Korean HBM. Packaging plants mount Samsung and SK Hynix HBMs and processors onto the same substrate, declaring them for export as low-performance processors. After the goods enter mainland China via Hong Kong, workshops then heat-remove the expensive HBMs, discarding the cheaper processors. Careless disassembly can damage the memory. A stack of HBM3E chips, which cost only a few hundred dollars a year ago, now fetches around $4,000 on the Chinese black market. An AI chip typically requires 6 to 8 stacks, costing $24,000 to $32,000 for memory alone. Some of this memory ultimately ends up with Huawei customers. Huawei's next-generation Ascend 960DT is planned for launch in the first quarter of 2027, but domestic HBM supply is insufficient, forcing Huawei to ask some customers to procure their own memory. Now, imitators are increasing. The smuggler in his 40s who was responsible for procuring chips from South Korea plans to sell his controlling stake in the company next year. He fears that more and more people will master this route, eventually attracting scrutiny from South Korean and US regulators. [Original Link]