The United States has charged a Super Micro co-founder with illegally diverting billions of dollars worth of servers equipped with Nvidia chips to China, launching its most high-profile case yet over the alleged smuggling of restricted AI technology into the Asian country.
American prosecutors have accused Yih-Shyan “Wally” Liaw of participating in a scheme to ship U.S.-assembled servers containing Nvidia’s most advanced chips to China in violation of U.S. export controls. Liaw and two other people linked to the company would have sold the AI technology through a company in Southeast Asia, knowing that the equipment would later be sent to China.
Also charged in the case were Ruei-Tsang “Steven” Chang, who worked as a manager at the company’s office in Taiwan, and Ting-Wei “Willy” Sun, an external service provider described by American authorities as a “fixer” who allegedly helped with the embezzlement.
The indictment marks the biggest chip smuggling case ever pursued by U.S. prosecutors since they began restricting Nvidia shipments to China in 2022. It comes on the heels of several smaller-scale arrests last year, after the Trump administration promised to crack down on violations of rules imposed to prevent China from using American AI accelerators to gain military advantage.
Fall in shares
The company’s shares plunged as much as 29% in early trading in New York on Friday, the biggest intraday drop since October 30, 2024.
Super Micro is a large assembler of AI servers with cutting-edge components from Nvidia, competing with companies such as Taiwan’s Foxconn Technology Group. The company, based in San Jose, California, accounts for about 9% of Nvidia’s revenue, according to data compiled by Bloomberg.
Continues after advertising
Liaw, a U.S. citizen, and Sun, a Taiwanese citizen, were arrested Thursday, according to a statement from Manhattan U.S. Attorney Jay Clayton’s office. Chang, a Taiwanese citizen, remains at large.
Liaw and Sun made their first appearances in federal court in San Jose, California. His lawyers did not immediately respond to requests for comment.
Super Micro said in a statement that it has placed Liaw and Chang on administrative leave and terminated its relationship with Sun. The company said it has been cooperating with the government investigation and will continue to do so.
Continues after advertising
The conduct allegedly carried out by the defendants “contravenes the company’s compliance policies and controls, including efforts to circumvent applicable export control laws and regulations,” Super Micro said in the note. The company said it maintains “a robust compliance program and is committed to full compliance with all applicable U.S. export and re-export control laws and regulations.”
“Company-1”
Prosecutors stated that, starting in 2024, the defendants and others involved promoted the sale of US$2.5 billion worth of Super Micro servers to the Southeast Asian company, identified in court documents only as “Company-1”, with the intention that they would be passed on to China. According to the indictment, Chinese customers received Super Micro’s “flagship” products — servers incorporating B200 and H200 chips, controlled by Nvidia — in unmarked boxes.
These servers were often assembled in the U.S. and shipped initially to Super Micro facilities in Taiwan, then delivered to “Company-1” in Southeast Asia and ultimately routed to buyers in China through third-party brokers, prosecutors said.
Continues after advertising
About a fifth of the total value of shipments occurred in the span of just a few weeks last year, just before the U.S. began requiring licenses for shipping AI chips to Southeast Asia as part of a Biden-era framework of global chip restrictions — a framework that Trump’s team later overturned.
“We need to accelerate this before May 13!” Liaw reportedly wrote to a Company-1 executive in January 2025, when these global export controls were first announced, with implementation scheduled for mid-May. The US currently does not require a license to ship Nvidia’s AI chips to countries such as Malaysia, Singapore and Thailand.
“Strict compliance is a top priority for Nvidia,” the Santa Clara, Calif.-based chip designer said in a statement. “We continue to work closely with our customers and the government on compliance programs as export regulations are expanded.”
Continues after advertising
It is not the first time that the US has made arrests for alleged smuggling of Nvidia chips to China.
In November, two Chinese citizens and two American citizens were accused of participating in a scheme that allegedly used a fake real estate company in Tampa, Florida, as a front to move hundreds of chips through Malaysia and ultimately to China.
In August, two Chinese nationals were accused of using a company based in El Monte, California, to export Nvidia’s advanced AI chips without obtaining the necessary government licenses.
Nvidia said it does not provide support or services for products illegally shipped to China.
Liaw, 71, co-founded Super Micro in 1993, according to a profile on the company’s website, and served on its board of directors. As of 2022, he has served as senior vice president of business development.
Liaw, Chang, 53, and Sun, 44, are each charged with conspiracy to violate export controls, a crime that carries a maximum sentence of 20 years in prison if convicted. They also face charges of conspiracy to smuggle U.S. goods and conspiracy to defraud the U.S., charges that can result in up to five years in prison each.
Prosecutors said the defendants and other Company-1 executives prepared false documents and communications to ensure the shipments were approved internally. To deceive Super Micro’s compliance team and a US Department of Commerce export control agent, they repeatedly set up “dummy” servers in the locations where Company-1 was supposed to be storing equipment that had already been shipped to China.
© 2026 Bloomberg L.P.
