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AI Chips · Export Controls · Smuggling · Supermicro
The U.S. Department of Justice charged three individuals linked to Supermicro, including co-founder Yih-Shyan Liaw, sales manager Ruei-Tsang Chang, and contractor Ting-Wei Sun, for allegedly illegally smuggling at least $2.5 billion worth of AI technology to China, which caused Supermicro's stock to plummet 27%.
Liaw and Sun have been arrested, while Chang remains a fugitive. Supermicro itself has not been named as a suspect and confirmed its cooperation with investigators, suspending the involved employees and terminating the contractor's relationship.
The suspects executed a complex plan to ship U.S. servers, including those with Nvidia A100 and H100 chips, via Taiwan to Southeast Asia, where devices were repackaged and forwarded to China. Between April and mid-May 2025, products exceeding half a billion dollars were shipped this way.
These actions circumvent U.S. export controls introduced in 2022, designed to prevent the Chinese military from accessing advanced AI technology. The news caused SMCI to fall 27% in premarket trading, wiping nearly $5 billion off its market value from approximately $18.5 billion.
Supermicro's valuation peaked at $67 billion in 2024, subsequently declining due to margin pressure and allegations from Hindenburg Research.
