Three individuals connected to Super Micro Computer, including its co-founder, have faced charges for allegedly facilitating the smuggling of at least $2.5 billion worth of U.S. artificial intelligence technology to China, violating export laws, as reported by the U.S. Department of Justice.
Although U.S. prosecutors did not name Super Micro in the complaint, referring to it only as a “U.S. manufacturer,” the San Jose, California-based company confirmed it received notification from federal prosecutors regarding the indictment on Thursday.
Super Micro emphasized that it is not named as a defendant in the case and highlighted its cooperation with investigators.
The Justice Department announced that Yih-Shyan Liaw, Ruei-Tsang Chang, and Ting-Wei Sun were indicted in a federal court in Manhattan, accused of orchestrating a sophisticated scheme to transport U.S.-made servers through Taiwan to various Southeast Asian countries. There, the servers allegedly underwent modifications, including being repackaged into unmarked boxes, before being sent to China.
Since 2022, the U.S. has imposed export restrictions on advanced AI chips destined for China.
In a statement, FBI Assistant Director in Charge James Barnacle detailed how the defendants employed fabricated documents, staged equipment to pass audits, and utilized a pass-through company to obscure their actions and client identities.
U.S. Attorney for the Southern District of New York Jay Clayton remarked that schemes of this nature “pose a direct threat to U.S. national security.”
Liaw co-founded Super Micro in 1993 and joined its board of directors in 2023. Chang served as a sales manager in the Taiwanese office of Super Micro, while Sun worked as a contractor.
Officials assert that the trio took extensive precautions to hide their activities from both U.S. server manufacturers and export control regulators. They allegedly used hair dryers to remove labels and serial numbers from actual machines, transferring them to dummy machines left behind after the authentic units were shipped to China.
Liaw, 71, a U.S. citizen, was arrested in California on Thursday along with Sun, 44, a company contractor. Chang remains at large, according to reports from The Associated Press.
Liaw has been released on bail, while Sun, a Taiwanese citizen, awaits a bail hearing set for Friday.
In response to the charges, Super Micro placed Liaw and Chang on leave and severed ties with Sun.
Following this news, Super Micro’s shares dropped by 8 percent in after-hours trading.
While U.S. officials did not specify which chips were involved in the alleged scheme, Nvidia is known to dominate the AI chip market, with its products commanding some of the highest prices.
In a statement, Nvidia, a supplier of chips to Super Micro and other server manufacturers, emphasized that “strict compliance” with export laws remains a top priority.
“We continue to collaborate closely with our customers and the government on compliance programs as export regulations evolve,” an Nvidia spokesperson stated.
“Unlawful diversion of controlled U.S. computers to China is detrimental across the board—Nvidia does not provide any service or support for such systems, and enforcement mechanisms are both rigorous and effective.”
