The San Jose-based company accounts for about 9% of Nvidia’s revenue.
Super Micro’s shares plummeted more than 20% in pre-market trading. US prosecutors charged Yih-Shyan “Wally” Liaw in a scheme to send US-assembled servers containing Nvidia’s cutting-edge chips to China in violation of US export controls.
Liaw and two others associated with the company allegedly sold the AI tech through a Southeast Asia company knowing it would be sent on to China. Also charged in the case were Ruei-Tsang “Steven” Chang, who served as a manager in the company’s Taiwan office, and Ting-Wei “Willy” Sun, an outside contractor described by US authorities as a “fixer” who allegedly aided in the diversion.DoorDash’s new paid tasks turn couriers into AI and robot trainersCryptocurrency and AI industries tested their influence in Illinois. It didn’t go that well The indictment marks the biggest chip smuggling case US prosecutors have pursued since first restricting Nvidia shipments to China in 2022. It comes on the heels of several smaller-scale arrests last year, after the Trump administration pledged to crack down on violations of rules imposed to prevent China from using American AI accelerators to gain a military edge.Super Micro is a major assembler of AI servers containing Nvidia’s cutting-edge components, competing with the likes of Taiwan’s Foxconn Technology Group. The San Jose, California-based company accounts for about 9% of Nvidia’s revenue, according to data compiled by Bloomberg. Liaw, a US citizen, and Sun, a citizen of Taiwan, were both arrested Thursday, according to a statement from the office of Manhattan US Attorney Jay Clayton. Chang, a Taiwanese citizen, remains a fugitive. Liaw and Sun made initial appearances in federal court in San Jose, California. Their lawyers didn’t immediately respond to requests for comment. Super Micro said in a statement that it has put Liaw and Chang on administrative leave and ended its relationship with Sun. The company said it has been cooperating with the government’s investigation and will continue to do so. The defendants’ alleged conduct “is a contravention of the company’s policies and compliance controls, including efforts to circumvent applicable export control laws and regulations,” Super Micro said in the statement. The company said it “maintains a robust compliance program and is committed to full adherence to all applicable US export and re-export control laws and regulations.”Prosecutors said that, beginning in 2024, the defendants and others caused the sale of $2.5 billion in Super Micro servers to the Southeast Asia company, which is identified in court papers only as “Company-1,” with the intention they would be passed on to China. The Chinese customers received Super Micro’s “flagship” products — servers incorporating Nvidia’s controlled B200 and H200 chips — in unmarked boxes, according to the charges. Those servers were often assembled in the US and first shipped to Super Micro’s facilities in Taiwan, then delivered to “Company-1” in Southeast Asia, and eventually forwarded to purchasers in China through third-party brokers, the prosecutors said. Around a fifth of the total shipments by value occurred in the span of just a few weeks last year, right before the US was set to require licenses for AI chip shipments to Southeast Asia as part of a Biden-era global chip curbs framework that Trump’s team has scrapped. “We need to speed these up before May 13!” Liaw allegedly wrote to a Company-1 executive in January 2025, when those global export controls were first announced with implementation scheduled for mid-May. The US doesn’t currently require a license to ship Nvidia AI chips to countries like Malaysia, Singapore and Thailand. “Strict compliance is a top priority for Nvidia,” the Santa Clara, California-based chip designer said in a statement. “We continue to work closely with our customers and the government on compliance programs as export regulations have expanded.”In November, two Chinese nationals and two US citizens were charged in a scheme that allegedly used a fake real estate business in Tampa, Florida, as a front to move the shipments of hundreds of chips through Malaysia and ultimately to China. In August, two Chinese nationals were charged with using a company based in El Monte, California, to export advanced Nvidia AI chips without obtaining the necessary government licenses.Liaw, 71, co-founded Super Micro in 1993, according to a profile on the company’s website, and was on its board of directors. Since 2022 he was senior vice president, business development. Liaw, Chang, 53, and Sun, 44, are each charged with conspiracy to violate export controls, which carries a maximum prison sentence of 20 years, if they’re convicted. They’re also charged with conspiracy to smuggle goods from the US and conspiracy to defraud the US, both of which are punishable by up to five years behind bars. Prosecutors said the defendants and other company executives prepared phony documents and communications to ensure the shipments were approved internally. To deceive Super Micro’s compliance team and an export control officer from the US Department of Commerce, they repeatedly staged non-working “dummy” servers where Company-1 was supposed to be storing servers that had already been shipped to China.–With assistance from Ian King, Debby Wu and Mackenzie Hawkins.Dear Abby: Do we need to hide our role-play weekends from our son?Miss Manners: I'm appalled that these young women just walk into people's housesMiss Manners: We want to explain our baby's name so this doesn't happen again What’s the state of the California governor’s race? New poll shows voters are ‘disengaged and largely unenthusiastic’ What's the state of the California governor's race? New poll shows voters are 'disengaged and largely unenthusiastic'TikTok influencer whose 'mommy makeover' went awry dies at age 47
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