Super Micro Computer: Sharp Plunge After Massive Allegations of Smuggling AI Chips to China

According to the indictment unsealed Thursday by the U.S. Attorney's Office for the Southern District of New York, Yih-Shyan “Wally” Liaw (co-founder and board member of Super Micro), Ruei-Tsang Chang (sales executive), and Ting-Wei Sun (contractor) allegedly conspired to divert at least $2.5 billion worth of AI servers containing high-end Nvidia GPUs (including B200, H200, and other export-restricted models). Sophisticated Scheme to Bypass U.S. Sanctions Prosecutors describe a complex operation starting in 2024:

Massive orders for Super Micro servers were placed through an intermediary company in Southeast Asia (referred to as “Company-1” in court documents). These U.S.-assembled servers, fitted with Nvidia chips requiring export licenses, were then rerouted to China via transshipments, anonymous packaging, falsified customs documents, and shell companies. At least $510 million worth of servers were confirmed delivered to China between late April and mid-May 2025, without the required U.S. export licenses imposed since the 2022 restrictions.

The DOJ describes the scheme as a “flagrant violation” of export control laws, driven by national security concerns: preventing China from accessing advanced AI technologies that could be used for military purposes. Super Micro's Immediate Response The company issued a swift statement:

Super Micro itself is not charged as a corporate entity. The three individuals have been placed on administrative leave (two employees) or terminated (the contractor). The company says it is fully cooperating with authorities and stresses that these actions violated its internal compliance policies.

Despite the statement, investor confidence took a severe hit. The stock, which closed at $30.79 on Thursday (+1.45%), was trading around $22.50–$23.00 in pre-market Friday, representing a 25–27% drop in hours. Context: An AI Leader Under Pressure Super Micro has become a key supplier of AI-optimized servers, thanks to its rapid integration of Nvidia Blackwell GPUs and expertise in liquid cooling. The company had recently raised its fiscal 2026 (ending June) revenue guidance to at least $40 billion, fueled by explosive demand from hyperscalers (Microsoft, Meta, Google, etc.). However, this scandal comes at a sensitive time:

A relative slowdown in AI server growth momentum. Intensifying competition (Dell, HPE, Lenovo, and Chinese players). Heightened scrutiny on the entire supply chain tied to Nvidia and China.

Potential Consequences Analysts already expect sharp downward revisions to price targets (previous average around $42 before the event). Key risks include:

Loss of trust from U.S. clients and hyperscalers. Potential suspension or restrictions on Nvidia chip shipments to Super Micro. Broader investigations (SEC, BIS – Bureau of Industry and Security). Possible fines or contract non-compliance clauses.

For now, neither Nvidia nor Super Micro faces direct corporate charges. But the case sharply highlights the geopolitical tensions surrounding AI technology supremacy. Wall Street will closely watch today's market open: technical rebound or continued panic selling? One thing is clear: for Super Micro, rebuilding trust will be a long and challenging road.