A criminal indictment was unsealed by the U.S. Attorney’s Office for the Southern District of New York against three individuals linked to Super Micro Computer, including co‑founder Yih‑Shyan “Wally” Liaw, for allegedly diverting $2.5 billion of Nvidia‑powered AI servers to China in violation of U.S. export‑control laws.
The indictment names Liaw, sales manager Ruei‑Tsang “Steven” Chang of Super Micro’s Taiwan office, and contractor Ting‑Wei “Willy” Sun. It alleges the trio used a Southeast‑Asian shell company, removed identifying labels—sometimes with hair dryers—and shipped the servers to Chinese buyers without the required licenses, using dummy units to mislead inspectors.
Super Micro was not named as a defendant. The company immediately placed the implicated employees on administrative leave, terminated its relationship with the contractor, and stated it was cooperating with investigators to address the alleged violations.
Super Micro’s recent financial performance provides context for the impact of the indictment. In the fiscal second quarter ending December 31 2025, the company reported revenue of $12.68 billion—well above the $10.34 billion consensus estimate—and earnings per share of $0.69 versus the $0.49 estimate, a beat of $0.20 or 41%. However, the next‑generation gross margin fell 310 basis points to 6.4% in the same period, reflecting pricing pressure and cost inflation in the AI‑server segment.
On March 20, the day after the indictment was unsealed, Super Micro’s market value fell by roughly 28%, erasing more than $4 billion in equity. Investors cited the legal exposure, potential fines, and the risk that Nvidia—its primary GPU supplier—might reconsider its partnership. The event also contributed to a broader sell‑off in AI‑chip stocks, as concerns over export controls intensified.
The indictment comes amid a tightening U.S. export‑control regime aimed at limiting advanced semiconductor technology to China. Super Micro has faced prior scrutiny, including SEC accounting fraud charges in 2020 and a 2024 Hindenburg Research report alleging export‑control violations. Competitors such as Dell Technologies saw their shares rise on the news, suggesting a shift in investor preference toward firms perceived as lower risk.
Super Micro’s spokesperson said the company maintains a robust compliance program and is committed to adhering to all U.S. export‑control laws. The statement emphasized that the company is cooperating with investigators and that the alleged conduct was a contravention of its internal policies.
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