Co-founder of Super Micro and Two Others Indicted: Allegedly Conspired to Smuggle NVIDIA AI Servers to China, SMCI Drops 12% After Hours

According to 1M AI News monitoring, the Southern District of New York Federal Prosecutor's Office publicly disclosed an indictment, charging server manufacturer Super Micro Computer's co-founder and board member Yih-Shyan "Wally" Liaw, Taiwan sales manager Ruei-Tsan "Steven" Chang, and contractor Ting-Wei "Willy" Sun with violating the Export Control Reform Act by illegally shipping servers equipped with NVIDIA AI chips to China.

Since 2024, the three individuals used a Southeast Asian intermediary to forge documents, disguised the servers as intended for local use, then had a logistics company repackaging them for shipment to China. When the company's compliance team and auditors visited for an inspection, the three individuals presented "fake" servers and proactively arranged for a "friendly" auditor to conduct the review. After the audit passed in August 2025, Liaw exclaimed, "That's spectacular!" and promptly urged, "Order now!"

On August 20, 2025, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) notified Super Micro that there was reason to believe the Southeast Asian companies were redirecting the servers to China and subsequently conducted an on-site inspection. On December 18, 2025, the day before federal inspectors visited, Sun and his associates used a hairdryer in the warehouse to peel off the original server serial number stickers, reapplied them to the fake servers and packaging boxes one by one, and repackaged them. The entire process was recorded by warehouse surveillance cameras, with screenshots included in the indictment. During the inspection the next day, Sun used the alias "Michael," posing as an assistant from a local law firm to receive the federal inspectors, answering all inquiries throughout and falsely claiming that the servers had never left the designated warehouse.

The indictment revealed that the amount involved amounted to approximately $2.5 billion since 2024, with around $510 million flowing into China from late April to mid-May 2025. Super Micro itself is not a defendant; Liaw and Sun were arrested on the day of the indictment, while Chang is currently at large, with the company stating that the above actions "violated the company's compliance policies."

This is the latest case of recent AI chip export control enforcement escalation. The U.S. government has long been investigating how NVIDIA's high-performance chips have circumvented controls to enter China, and after this case was exposed, SMCI's stock price fell by 12% in after-hours trading.