Federal prosecutors on Thursday charged three individuals with conspiring to illegally export billions of dollars worth of advanced Nvidia chips to China, circumventing U.S. Export controls. The charges, unsealed in Manhattan federal court, allege a scheme to divert high-performance computer servers containing the chips between 2024 and 2025.
Yih-Shyan Liaw, a co-founder and board member of Super Micro Computer Inc., Ruei-Tsan Chang, a manager at the company’s Taiwan office and Ting-Wei Sun, a contractor, are accused of violating the Export Control Reform Act, smuggling goods, and conspiring to defraud the United States. Liaw was arrested in California and released on bail, while Sun remains in custody awaiting a detention hearing. Chang is currently at large.
According to the indictment, the diverted servers contained Nvidia’s artificial intelligence chips, which are subject to strict U.S. Export controls barring their sale to China without a license. These controls are in place to protect U.S. National security and foreign policy interests, particularly as American AI companies face increasing competition from Chinese rivals like DeepSeek.
The U.S. Attorney’s Office for the Southern District of Recent York alleges the defendants employed deceptive tactics, including fabricated documents, staged inventory audits, and the use of a pass-through company, to conceal the true destination of the servers and their clientele. The total value of the diverted equipment is estimated at $2.5 billion, according to CNN reporting.
Super Micro Computer released a statement acknowledging the charges and stating that Liaw and Chang have been placed on administrative abandon, and their relationship with Sun has been terminated. The company emphasized that the alleged conduct contravenes its policies and compliance controls, and that it is fully cooperating with the investigation. “Supermicro maintains a robust compliance program and is committed to full adherence to all applicable U.S. Export and re-export control laws and regulations,” the statement read.
Shares of Super Micro Computer fell approximately 12% in extended trading following the release of the indictment, reflecting investor concern over the potential impact of the legal proceedings. The FBI Assistant Director in Charge, James C. Barnacle Jr., stated that diversion schemes like this generate billions in illicit profits and represent a “direct threat to U.S. National security.”
The case highlights the ongoing U.S. Government effort to crack down on the illegal shipment of advanced technology to China, particularly in the realm of artificial intelligence. President Biden’s administration, continuing policies initiated under President Trump, has imposed restrictions on the sale of Nvidia’s most powerful processors to China, aiming to maintain a competitive edge in the rapidly evolving AI landscape.
As of Friday, Super Micro Computer had not responded to requests for further comment beyond its initial statement. The Department of Justice has not announced a trial date.
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