Chinese Firms Stockpile High-End Samsung Chips As U.S. Curbs Loom

Chinese tech giants, including Huawei and Baidu, along with various startups, are stockpiling high-bandwidth memory (HBM) semiconductors from Samsung Electronics in anticipation of impending U.S. export curbs on the chips to China, according to three sources, as reported by Heekyong Yang, Fanny Potkin, and Karen Freifeld for Reuters.

China accounted for about 30% of Samsung's HBM chip revenue in the first half of 2024. I Photo: Samsung

These companies have significantly increased their purchases of the AI-capable semiconductors since early this year, contributing to China accounting for about 30% of Samsung's HBM chip revenue in the first half of 2024, according to one of the sources.

This indicates how China is preparing to maintain its technology ambitions amid rising trade tensions with the U.S. and other Western nations. It also highlights the impact these tensions are having on the global semiconductor supply chain.

U.S. authorities are expected to unveil an export control package this month that will impose new restrictions on shipments to China’s semiconductor industry, according to sources cited by Reuters last week.

The package is anticipated to include parameters for restricting HBM chip access.

The U.S. Department of Commerce declined to comment but stated last week that it is continually assessing the evolving threat environment and updating export controls "to protect U.S. national security and safeguard our technological ecosystem."

Reuters was unable to determine the specifics of the proposed HBM restrictions and how they would affect China.