Taiwan Prosecutors Raid Super Micro Over Nvidia AI Chip Smuggling

Taiwan prosecutors expanded a Nvidia AI chip smuggling investigation Monday by raiding Super Micro Computer’s Taiwan office, sending the server maker’s stock down 8% and putting the company at the center of the island’s first public enforcement action against AI chip diversion to China. The Keelung District Prosecutors Office searched six residences and the sites of three affiliated companies, including Super Micro’s local office, Taiwanese data center operator Chief Telecom, and Super Micro distributor Albatron Technology, per Bloomberg’s reporting. The agency’s statement did not name the residents it searched.

The Monday raids sit on top of a March federal indictment from the Southern District of New York that charged Super Micro co-founder Yih-Shyan ‘Wally’ Liaw and two others with conspiring to divert roughly $2.5 billion worth of servers carrying Nvidia AI accelerators to China. Liaw has pleaded not guilty, resigned from Super Micro’s board, and been released on bond, with trial set for November. Super Micro itself has not been charged in either jurisdiction, and the company said in a statement Monday that it is cooperating with authorities in both.

What Prosecutors Searched on Monday in Keelung

The Monday action was carried out by the Keelung District Prosecutors Office, the same agency that detained three people in May on charges of forging export documents tied to Nvidia-equipped servers leaving the island. Investigators searched six residences and three affiliated sites, including Super Micro’s Taiwan office, Taiwanese data center operator Chief Telecom, and Albatron Technology, a Super Micro distributor, per Bloomberg. The office has not identified the residents it searched.

Albatron confirmed in a Taiwan Stock Exchange filing Monday that it had been searched but did not explain why, saying there was no financial or operational impact. Chief Telecom did not immediately comment on the raids, per Bloomberg. The prosecutors’ statement said the searches were part of an ‘ongoing investigation into the alleged illegal export of Super Micro’s servers’ carrying Nvidia AI chips, and the office separately summoned the six individuals for questioning, per the Business Times Singapore. The agency has not named those summoned.

Super Micro said in a statement Monday that it is ‘working closely with Taiwanese authorities’ and ‘remains committed to protecting its technology and intellectual property,’ per The Next Web. The company added that its products ‘continued to be targeted in the smuggling cases’ and that it is cooperating with law enforcement in Taiwan and other jurisdictions. Super Micro has not been charged in either the Taiwan investigation or the federal case in New York.

What’s Already in the Federal Indictment

A federal grand jury in Manhattan unsealed the underlying case in March, charging Liaw, Ruei-Tsang ‘Steven’ Chang, and Ting-Wei ‘Willy’ Sun with conspiring to divert US-assembled servers integrating Nvidia AI accelerators to China. The indictment, published on the Department of Justice’s website, names Liaw as a co-founder and senior vice president of business development at the publicly traded manufacturer, and Chang as a general manager in its Taiwan office. Sun is described as a third-party broker the indictment says worked ‘with Liaw, Chang, and others to divert U.S.-export controlled technology to China.’ Each of the three defendants faces up to 20 years in prison on the Export Controls Reform Act conspiracy count, per the DOJ press release.

The scale the prosecution alleges is striking. Between 2024 and 2025, a Southeast Asian front company referred to in court papers only as ‘Company-1’ purchased approximately $2.5 billion worth of servers from the manufacturer, many assembled in the United States, per the indictment. Between late April and mid-May 2025 alone, ‘at least approximately $510 million’ of those servers were diverted to mainland China. The case was brought by US Attorney Jay Clayton for the Southern District of New York, whose office called the scheme ‘systematic.’ The defendants generated ‘billions of dollars in ill-gotten gains,’ prosecutors said.

Prosecutors allege the route ran through Southeast Asia with unusual precision. Liaw and Chang directed executives at the front company to order servers assembled in the United States, shipped to Super Micro’s Taiwan facilities, and delivered on to the front company elsewhere in the region, per the indictment. To mislead Super Micro’s compliance team, the defendants staged thousands of ‘dummy’ servers at the front company’s warehouses, using a hair dryer to peel serial-number stickers from real boxes and apply them to dummy units.

• Hair dryer trick: Surveillance footage allegedly caught Sun using a hair dryer to peel serial-number stickers from real Super Micro boxes and apply them to dummy servers staged at a warehouse rented by the front company.
• Compliance audits: The same dummy servers were presented at both an internal Super Micro compliance audit in August 2025 and a follow-up inspection by the US Department of Commerce, per the indictment.
• No license: At no point did Liaw, Chang, or the US manufacturer hold a US Commerce Department license to export the servers to China.
• Maximum sentence: The Export Controls Reform Act conspiracy count carries up to 20 years in prison; two additional counts each carry up to five years.

Liaw, 71, of Fremont, California, and Sun, 44, were arrested in the Northern District of California the day the indictment was unsealed; Chang, 53, remains a fugitive. Liaw has pleaded not guilty, was released on an unsecured bond, and resigned from Super Micro’s board three days later, per CNBC. Super Micro placed both Liaw and Chang on administrative leave and stopped working with Sun. Trial is set for November, per The Next Web.

Years of US Pressure Land on the Island

The Monday raids are the most visible signal yet of Taiwan’s first public crackdown on AI chip diversion to China. Bloomberg’s report described the action as an expansion of that crackdown, and it follows years of US pressure on the island to take a more active role in policing China’s access to advanced semiconductors. In May, Keelung prosecutors had detained three individuals, including Liaw, on charges of forging export documents tied to Nvidia-equipped servers leaving Taiwan.

The legal frame prosecutors are using reveals how narrow Taiwan’s existing tools remain. Unauthorized AI chip exports to mainland China are not currently classified as a crime in Taiwan, so prosecutors have had to charge the smuggling cases under existing statutes such as document forgery. The Taipei government is considering criminalizing AI chip exports to China directly, a move that would give local prosecutors a dedicated charge to pursue the trade, per The Next Web. The May seizures that prompted the broader probe netted roughly 50 Super Micro servers before they could leave the island, per The Next Web.

Stock Sells Off, With the August Earnings Report on Deck

Super Micro’s shares fell as much as 9% during Monday trading before closing 8% lower at $28.15, Yahoo Finance reported. The stock has become one of the more compliance-sensitive trades in AI hardware, with each new headline in the case triggering fresh moves, the outlet noted. The slide punctuates a turbulent run-up to an August 4 earnings report.

The export-control scrutiny has already bled into Super Micro’s reporting. The company’s most recent quarterly filing flagged that its results were preliminary and unaudited while the board conducts an independent review of certain export-control transactions, per Yahoo Finance. The board installed acting Chief Compliance Officer DeAnna Luna, who joined Super Micro from Intel in 2024, per CNBC. The August earnings call will be the first public airing of the board’s findings. Super Micro has not been charged in either the Taiwan or US investigations.

• $28.15: SMCI’s Monday close, after touching a session low of 9% down.
• $2.5 billion: Total value of servers named in the March federal indictment.
• Unaudited: Latest quarterly results flagged preliminary pending export-control board review.
• August 4: Super Micro’s next scheduled earnings print.

The legal cloud is the latest in a string of pressures on the name. In June, Super Micro had already pushed out a major equity offering to fund growing AI server demand, a move that drew widespread analyst criticism over dilution concerns. The company has not yet disclosed what transactions the board’s export-control review is examining, per Yahoo Finance. The next test is the August earnings print.

Nvidia Calls Smuggled Servers a ‘Dead End’

Nvidia’s CEO used the same week the Taiwan raids landed to make the company’s position on smuggled hardware impossible to ignore. Jensen Huang told shareholders at Nvidia’s June 24 annual stockholder meeting that data centers built from diverted servers are a national-security problem and a technical dead end, per CNBC. The June 24 remarks came weeks after the Super Micro indictment was unsealed in Manhattan.

‘Advanced AI data centers are massive integrated systems that require trusted hardware, software, networking, and continuing support,’ Huang told shareholders, per CNBC. He added that Nvidia would not provide support or repairs for systems built from chips that reached restricted markets through smuggling, the same outlet noted.

Trying to cobble together data centers with some smuggled products is a dead end.

Jensen Huang delivered the line at Nvidia’s June 24 annual stockholder meeting, where he tied national security, AI infrastructure, and US export-control policy into a single argument. The CEO stressed that advanced AI data centers are integrated systems requiring trusted hardware, software, networking, and continuing support, per CNBC. Huang had spent months prior lobbying the US government to permit chip sales to restricted markets, per CNBC. The CEO’s position on smuggled hardware ran alongside his wider stance that national security takes priority over chipmaker business interests.

The warning lands as Nvidia weighs a wider US-China deal that would let it sell more advanced AI chips into China. China, including Hong Kong, accounted for about 9% of Nvidia’s fiscal 2026 revenue, well below prior years, per CNBC. A US reversal of Biden’s AI Diffusion Rule approved H200 chip exports to China, but Nvidia has yet to translate that change into China-based revenue, Huang acknowledged at the same meeting.

Frequently Asked Questions

Has Super Micro been charged in the chip smuggling case?

Not yet, in either jurisdiction. The Monday raids are part of an ongoing investigation, and Super Micro itself is described in court papers as the manufacturer whose products were diverted. The company has said it is cooperating with authorities in Taiwan and other jurisdictions and that its products ‘continued to be targeted in the smuggling cases,’ per The Next Web.

What did Monday’s raids actually hit?

Taiwan’s Keelung District Prosecutors Office searched six residences and the sites of three affiliated companies, including Super Micro’s Taiwan office, Taiwanese data center operator Chief Telecom, and Albatron Technology, a Super Micro distributor. Albatron confirmed the search in a Taiwan Stock Exchange filing Monday and said there was no financial or operational impact, per Yahoo Finance.

What was Super Micro’s co-founder charged with?

Yih-Shyan ‘Wally’ Liaw was charged in March by a federal grand jury in Manhattan with conspiring to violate the Export Controls Reform Act, conspiring to smuggle goods from the United States, and conspiring to defraud the United States. The first count carries a maximum sentence of 20 years, per the federal indictment. Two co-defendants, Ruei-Tsang ‘Steven’ Chang and Ting-Wei ‘Willy’ Sun, were charged alongside him. Chang remains a fugitive.

Why is Taiwan acting now?

Per Bloomberg’s report, the Monday raids are the latest expansion of Taiwan’s first public crackdown on AI chip diversion to China, and they follow years of US pressure on Taipei to take a more active role in policing chip flows. Prosecutors began detaining suspects in May on document-forgery charges. The Taipei government is now considering criminalizing unauthorized AI chip exports to China directly, since those exports are not currently classified as a crime under Taiwanese law.

When does Super Micro’s next earnings report arrive?

Super Micro is scheduled to release earnings on August 4, per Yahoo Finance. The company has already flagged that its most recent quarterly results are preliminary and unaudited while its board conducts an independent review of certain export-control transactions, the same outlet noted.