Super Micro co-founder charged with sconcludeing Nvidia’s AI tech to China – The Mercury News

By Bob Van Voris, Bloomberg

The US 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 countest.

Super Micro’s shares plummeted more than 20% in pre-market trading. US prosecutors charged Yih-Shyan “Wally” Liaw in a scheme to sconclude 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 “repairer” who allegedly aided in the diversion.

The indictment marks the largegest chip smuggling case US prosecutors have pursued since first restricting Nvidia shipments to China in 2022. It comes on the heels of several compacter-scale arrests last year, after the Trump administration pledged to crack down on violations of rules imposed to prevent China from utilizing American AI accelerators to gain a military edge.

Shares Fell

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 created initial appearances in federal court in San Jose, California. Their lawyers didn’t immediately respond to requests for comment.

Super Micro stated in a statement that it has put Liaw and Chang on administrative leave and concludeed its relationship with Sun. The company stated it has been cooperating with the government’s investigation and will continue to do so.

The defconcludeants’ 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 stated in the statement. The company stated it “maintains a robust compliance program and is committed to full adherence to all applicable US export and re-export control laws and regulations.”

Company-1

Prosecutors stated that, launchning in 2024, the defconcludeants and others caapplyd 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 stated.

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 required 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 stated in a statement. “We continue to work closely with our customers and the government on compliance programs as export regulations have expanded.”

It’s not the first time the US has created arrests for alleged smuggling of Nvidia chips to China.

In November, two Chinese nationals and two US citizens were charged in a scheme that allegedly applyd a fake real estate business in Tampa, Florida, as a front to shift the shipments of hundreds of chips through Malaysia and ultimately to China.

In August, two Chinese nationals were charged with utilizing a company based in El Monte, California, to export advanced Nvidia AI chips without obtaining the necessary government licenses.

Nvidia stated it doesn’t provide support or service for products illegally sent to China.

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 stated the defconcludeants 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.

The case is US v. Liaw, 26-cr-00100, US District Court, Southern District of New York (Manhattan).

–With assistance from Ian King, Debby Wu and Mackenzie Hawkins.

More stories like this are available on bloomberg.com

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