Sino-US conflict | Chinese companies reportedly hoarded Samsung HBM chips to prevent the US from introducing new restrictions

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Reuters quoted sources as saying that Huawei and Baidu (09888) and some startups are stockpiling high-bandwidth memory (HBM) chips produced by Samsung Electronics in anticipation of the United States restricting exports of such chips to China.

It is reported that since the beginning of this year, these companies have increased their procurement of artificial intelligence (AI) chips, making the Chinese market contribute about 30% of Samsung’s HBM chip revenue in the first half of the year.

Sources familiar with China’s interest in HBM said Chinese chip demand is mainly concentrated in HBM2E, which is two generations behind the most advanced HBM3E version.

It is difficult to estimate the number or value of HBM chips stored in China, but sources say that companies ranging from satellite manufacturers to Tencent Holdings Ltd.00700) have been buying these chips. Chip design startup Zhongke Haoxin recently ordered HBM chips from Samsung, and Huawei has been using Samsung HBM2E semiconductors to manufacture its advanced Ascend AI chips.

Reuters quoted sources last week as saying that U.S. authorities plan to announce an export control plan this month that will impose new restrictions on exports to China’s semiconductor industry.

The plan is expected to set parameters for restricting the export of HBM chips. The U.S. Department of Commerce said in a statement last week that it is continuously evaluating changing threat factors and updating export controls to protect U.S. national security and maintain its technology ecosystem.

HBM chips are key components in developing advanced processors such as Nvidia’s graphics processing units (GPUs), which are used for generative AI work.

Currently, only three major chip manufacturers produce HBM chips, namely SK Hynix and Samsung in South Korea, and Micron Technology in the United States. According to reports, the restriction on HBM sales to China has a greater impact on Samsung. Micron has avoided selling its HBM products to China since last year, while SK Hynix is more focused on advanced HBM chip production.