Co-founder and Taiwan General Manager of Supermicro indicted by U.S. Department of Justice: smuggling billions of dollars worth of NVIDIA chips into China, causing SMCI stock to plummet 12%

On the 19th, the U.S. Department of Justice unsealed an indictment naming three individuals involved with Super Micro Computer (SMCI). Co-founder Yih-Hsien Liao and Taiwan Office General Manager Ruisan Zhang are accused of using Southeast Asian companies as a staging ground, forging documents, and re-packaging servers equipped with controlled AI chips to secretly transport to China.
(Background: Trump allowed exports of NVIDIA H200 to China—though with a 25% tariff—marking a new paid unlocking phase in the US-China chip war)
(Additional context: Elon Musk aims to build the world’s largest chip factory—TeraFab—with an annual output goal of 200 billion chips, surpassing TSMC)

Super Micro, a major server manufacturer, has seen senior executives arrested. The indictment, unsealed by the Department of Justice on the 19th, specifically names three defendants. Co-founder Yih-Hsien Liao has been detained by U.S. authorities (he also serves on the board and as a senior vice president of business development).

The other two defendants are Ruisan Zhang, General Manager of Super Micro’s Taiwan office, and third-party intermediary Sun Ting-Wei (already arrested).

Criminal Methods: Southeast Asian staging, false documents, re-packaging

According to the indictment, the three are suspected of conspiring with executives of a Southeast Asian “Company 1” to design a multi-layered cover-up system. The process is as follows: servers are assembled in the U.S., then shipped to Super Micro’s Taiwan facility, and finally transferred to Southeast Asia.

The last step involves re-packaging the servers into unmarked boxes for export to China. (All these servers are equipped with high-end NVIDIA AI chips, which are restricted by U.S. export controls to China)

“Company 1” acts as the “ultimate user” in the transaction chain, placing orders with Super Micro under its name to purchase servers with controlled AI GPUs, thereby circumventing U.S. export restrictions. The three also allegedly created false records and forged inventory audit documents, making oversight mechanisms ineffective.

FBI Assistant Director Barnacle stated in the announcement:

“These defendants are suspected of forging documents, setting up false devices to manipulate inventory audits, and using shell companies to conceal their illegal activities.”

Scale: $2.5 billion in procurement, $500 million in a single wave of transfers

The indictment reveals that between 2024 and 2025, “Company 1” purchased servers from Super Micro through these channels totaling approximately $2.5 billion. In just three weeks from late April to mid-May 2025, about $510 million worth of servers were transferred to China.

Super Micro has faced market scrutiny in recent years over financial reporting issues. The indictment of its co-founder and Taiwanese executives has reignited concerns over corporate governance and export compliance, causing SMCI’s stock to plummet over 12% after hours.