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The United States charged a Super Micro Computer Inc. co-founder with illegally diverting billions of dollars in Nvidia Corp.-powered servers to China, initiating its highest-profile case against alleged smuggling of restricted AI technology to the Asian country.
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U.S. prosecutors charged Yih-Shyan “Wally” Liaw in a scheme to send U.S.-assembled servers containing Nvidia’s cutting-edge chips to China in violation of U.S. 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.
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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 U.S. authorities as a “fixer” who allegedly aided in the diversion.
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The indictment marks the biggest chip smuggling case U.S. 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.
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Shares Fell
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The company’s shares plummeted as much as 29 per cent in early trading in New York on Friday, the biggest intraday decline since Oct. 30 2024.
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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 nine per cent of Nvidia’s revenue, according to data compiled by Bloomberg.
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Liaw, a US citizen, and Sun, a citizen of Taiwan, were both arrested Thursday, according to a statement from the office of Manhattan U.S. Attorney Jay Clayton. Chang, a Taiwanese citizen, remains a fugitive.
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Liaw and Sun made initial appearances in federal court in San Jose, California. Their lawyers didn’t immediately respond to requests for comment.
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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.
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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.”
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Prosecutors said that, beginning in 2024, the defendants and others caused the sale of US$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.
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