The U.S. Department of Justice has charged three individuals linked to Supermicro. Among them is co-founder Yih-Shyan Liaw. They are suspected of illegally smuggling at least $2.5 billion worth of AI technology to China via a route through Taiwan and Southeast Asia.
In addition to Yih-Shyan Liaw, the others involved are Ruei-Tsang Chang, a sales manager at the Taiwan office, and contractor Ting-Wei Sun. Liaw and Sun have been arrested; Chang is a fugitive. Supermicro itself has not been named as a suspect in the case and confirmed that it has cooperated with investigators.
Supermicro has suspended the employees involved and terminated its relationship with the contractor.
Detour via Taiwan and Southeast Asia
According to the Department of Justice, the three suspects carried out a complex plan to ship U.S. servers via Taiwan to countries in Southeast Asia. There, the devices were repackaged in unmarked boxes and forwarded to China. Between April and mid-May 2025, products worth more than half a billion dollars were shipped in this manner.
U.S. export controls on AI chips were introduced in 2022 to prevent the Chinese military from gaining access to advanced technology and to slow down Chinese AI development. Supermicro had previously indicated that these restrictions affected certain products, including servers with the Nvidia A100 and H100 chips.
Stock Plummets After Charges Announced
The news hit the stock hard. SMCI fell 27 percent in premarket trading, wiping nearly $5 billion off its market value. The company was valued at approximately $18.5 billion at that time.
Demand for AI chips had driven Supermicro’s valuation to a peak of $67 billion in 2024. Subsequently, margin pressure in the construction of expensive servers and allegations from the now-defunct short-seller Hindenburg Research led to the stock’s decline.
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