Super Micro Co-Founder Alleged in Smuggling $2.5 Billion Worth of Nvidia AI Chips to China, Stock Plummets 12% in After-Hours Trading

Super Micro Computer (SMCI), a well-known server manufacturer, co-founder Yih-Shyan Liaw, Taiwan office manager Ruei-Tsang Chang, and external contractor Ting-Wei Sun were today charged by the U.S. Department of Justice with allegedly using a multi-layer transit scheme to illegally ship AI servers equipped with Nvidia (NVDA) high-end chips to China, totaling up to $2.5 billion, in violation of U.S. export control policies.

U.S. prosecutors have indicted Super Micro executives, Taiwan regional manager, and contractor, with two individuals arrested and one at large.

According to the indictment released this morning by the U.S. Department of Justice, the three defendants include Super Micro co-founder Yih-Shyan Liaw, Taiwan office manager Ruei-Tsang Chang, and middleman Ting-Wei Sun. They are charged with violating the Export Control Reform Act by allegedly assisting in the shipment of AI servers subject to strict export restrictions to China.

CNBC revealed that Liaw is a co-founder and board member of Super Micro, reportedly holding $464 million worth of shares.

Liaw and Sun have been arrested, while Chang remains at large. Although Super Micro is not listed as a defendant, the company stated it will cooperate with the investigation and has taken measures such as suspension and termination of the involved personnel. Following the news, Super Micro’s stock price dropped nearly 12% in after-hours trading.

Layered Transit, Faking Reality: Smuggling Scheme Reaches $2.5 Billion

Prosecutors pointed out that the three individuals used sophisticated operations to evade regulation, first transporting servers with Nvidia high-end GPUs from the U.S. to Taiwan, then rerouting to Southeast Asian countries. They created fake documents through intermediary companies to simulate the equipment remaining locally. In reality, these devices were repackaged and transferred to China.

To bypass scrutiny, the involved parties even provided “fake servers” for inspection and used methods such as removing and replacing labels and misleading auditors to conceal the true destination of the equipment.

The indictment states that since 2024, these smuggling transactions have generated approximately $2.5 billion in sales for Super Micro, with over $500 million worth of equipment flowing into China via Southeast Asia between April and May 2025 alone.

Nvidia Responds: Continuing to Comply with Export Regulations

Reuters reported that Nvidia also issued a statement emphasizing its ongoing compliance with export control laws and strengthening its compliance programs:

Illegally rerouting controlled U.S. computers to China is a lose-lose move. Nvidia does not provide any services or support for such systems, and enforcement mechanisms are strict and effective.

U.S.-China Tech Tensions Escalate Again

As AI applications rapidly develop, demand for Nvidia’s high-performance chips has surged. The U.S. has long imposed restrictions on the export of advanced AI chips to China, claiming to protect national security and technological advantage. It was only in July and December last year that the U.S. gradually eased export restrictions on certain Nvidia chips like H20 and H200, allowing sales to China.

(US plans comprehensive controls on AI chip exports: Nvidia, AMD sales may require licenses, causing stock prices to fall on news)

It is reported that Liaw, the founder, sold more advanced chips such as the Nvidia Blackwell architecture B200 to China through his Southeast Asian company by the end of 2024. The sharp decline in Super Micro’s stock price after hours reflects market concerns over corporate compliance risks and geopolitical uncertainties.

This article, titled “Super Micro Co-founder Involved in Smuggling $2.5 Billion Nvidia AI Chips to China, Stock Plunges 12% After Hours,” first appeared on Chain News ABMedia.