Smugglers exploit server-processor packaging loophole to ship high-bandwidth memory chips to China, The Information reports

[The Information] U.S. export restrictions on AI chip shipments to China are porous, according to The Information, which reported on a technique gaining traction among smugglers involving a key type of memory chip. While U.S. export regulations ban shipping high-bandwidth memory chips on their own to China, including from countries such as South Korea, the rules contain a loophole allowing sales of those memory chips if they are packaged together on plates with cheap server processors whose performance falls below the export restriction threshold, according to the report. That is because the computing power of the package is determined by the server processor, not the memory chips, according to the rules.