Super Micro Computer Executives Charged with Smuggling
NEW YORK — A senior vice president at Super Micro Computer Inc., along with two associates from the company, faced charges on Thursday for their alleged role in smuggling billions in computer servers containing advanced Nvidia chips to China.
According to an indictment filed in Manhattan federal court, the individuals breached U.S. export control laws by planning to divert substantial numbers of high-performance servers assembled in the U.S. to China between 2024 and 2025.
FBI Assistant Director James C. Barnacle Jr. stated that the accused used false documents, staged audits, and a pass-through company to obscure their activities and actual client list.
U.S. Attorney Jay Clayton remarked that such operations “pose a direct threat to U.S. national security.”
Nvidia’s chips have become essential for data centers that support artificial intelligence—technology that has the potential to significantly alter societal dynamics and global power structures. This situation has sparked a competitive dynamic between the U.S. and China reminiscent of the WWII nuclear arms race.
In response to this competition, President Biden has restricted the sale of Nvidia’s AI chips to China, continuing a ban that started under President Trump for the most powerful processors. Although last year, the Trump administration began easing restrictions on less powerful AI chips, Nvidia still did not account for any sales to China in its recent revenue forecast.
Yih-Shyan “Wally” Liaw, aged 71, a U.S. citizen and senior vice president of Super Micro, was arrested in California, along with Ting-Wei “Willy” Sun, a 44-year-old contractor from Taiwan. Ruei-Tsang “Steven” Chang, a sales manager for Super Micro in Taiwan, remains at large. Liaw was released on bail while Sun awaits a bail hearing. Their legal representation was not immediately known.
The indictment alleges that Liaw and Chang instructed executives at a Southeast Asian firm to order $2.5 billion worth of servers from Super Micro between 2024 and 2025.
Over time, authorities say the operation became increasingly bold, resulting in at least $510 million worth of Super Micro servers being diverted to China post-assembly in the U.S.
While the company involved remains unnamed in the court documents, Super Micro did confirm the affiliations of the arrested individuals in a statement.
“The actions of these individuals, as alleged, contradict our company policies and compliance regulations, including attempts to bypass export control laws,” stated the company. “Supermicro remains committed to compliance with all relevant U.S. export laws and regulations.”
Moreover, the company said it has not been indicted and is fully cooperating with the investigation.
Nvidia affirmed that compliance is a top priority and emphasized, “Unlawful diversion of U.S. computers to China does not benefit anyone involved. We do not offer any support for such systems, and enforcement is rigorous.”
Nvidia has seen remarkable growth, with its market value rising from around $400 billion in late 2022 to an astounding $4.3 trillion today, surpassing all other companies globally.
Earlier this week, CEO Jensen Huang indicated that the AI boom is likely to persist, projecting a $1 trillion backlog in chip orders, which doubles his previous estimate.
