Additional Coverage:
- Supermicro—accused of smuggling $2.5 billion in Nvidia chips and servers to China—has been here before, with Iran (fortune.com)
Supermicro Co-Founder Charged in Alleged $2.5 Billion Nvidia Chip Smuggling Scheme to China
A co-founder of Silicon Valley tech giant Super Micro Computer, Inc. is facing federal charges for allegedly orchestrating a $2.5 billion scheme to smuggle high-end Nvidia graphics processing units (GPUs) to China, bypassing stringent U.S. export controls. The allegations, unsealed this week, mark a significant legal challenge for the company, whose stock plummeted following the news.
Yih-Shyan “Wally” Liaw, a co-founder of Supermicro, was charged Thursday with conspiring to smuggle approximately $2.5 billion worth of highly coveted Nvidia H200 and B200 GPUs in servers to China. Prosecutors claim Liaw, along with Supermicro’s Taiwan general manager Ruei-Tsang “Steven” Chang and a “fixer” named Ting-Wei “Willy” Sun, allegedly routed the servers through an unnamed Southeast Asian company before they reached Chinese buyers.
Authorities arrested Liaw and Sun this past week, while Chang remains a fugitive, according to the Department of Justice.
Supermicro, a prominent hardware manufacturer that has experienced substantial growth amid the AI boom, has not been accused of wrongdoing as a company. Its CEO and Chairman, Charles Liang, and board member Sara Liu, both co-founders, are also not implicated in the current charges.
In a statement, Supermicro confirmed that Liaw resigned his board seat on Friday and is currently on administrative leave. Chang is also on administrative leave, and Sun has been terminated. The company stated it is cooperating with law enforcement and was not named in the indictment.
The news sent Supermicro’s stock into a tailspin, dropping 33% in trading on Friday. This significant decline resulted in an estimated $860 million in single-day gains for short sellers who had collectively bet $2.6 billion against the company, according to financial data firm S3 Partners.
A Familiar Pattern: Past Export Violations
This is not Supermicro’s first encounter with export-control violations. Court records and the company’s own disclosures reveal striking similarities between the current allegations and a 20-year-old enforcement action also involving the company, which was founded in 1993 by Liaw, Liang, and Liu. None of the three founders were named or charged in the 2006 enforcement action.
In 2006, Supermicro pleaded guilty in federal court to illegally exporting computer equipment to Iran and paid a $150,000 fine to the Department of Justice. Separately, the company settled a parallel action with the Commerce Department’s Bureau of Industry and Security (BIS), paying a $125,400 civil penalty for 12 charges related to sales of servers, motherboards, and computer chassis. An additional $179,327 was paid to the Treasury Department’s Office of Foreign Assets Control (OFAC) to settle allegations under the Iranian Transactions Regulation, a violation OFAC stated Supermicro did not voluntarily disclose.
The two cases-separated by two decades and vast differences in scope-allegedly share a similar pattern: using a neighboring country as a seemingly legal destination, concealing the true buyer, and ultimately shipping restricted technology to a prohibited market. A representative for Supermicro declined to comment on the Iran violations.
The Alleged Schemes Unpacked
The Iran tech sales took place between September 2001 and March 2003. According to the BIS charging document from 2006, Supermicro illegally exported servers, motherboards, and computer chassis from the U.S. through the United Arab Emirates and then onto Iran on six separate occasions without the required licenses.
Officials stated Supermicro’s “senior director of strategic sales knew of, or had reason to know” about the embargo on sales to Iran. Supermicro settled the cases in September 2006, cooperating with the government and implementing an in-house export control program.
The indictment unsealed this week claims the accused trio of Liaw, Sun, and Chang allegedly conspired to route servers containing Nvidia chips in 2024. The defendants allegedly sent the servers through an unnamed Southeast Asian company before they made their way to China.
The mechanics alleged in the current indictment mirror the Iran violation. In the alleged China scheme, the Southeast Asian company submitted repeated purchase orders to Supermicro purportedly for its own use.
Instead, after the servers were assembled in the U.S., the Southeast Asian company allegedly sent them on to the real buyers in China. To conceal the operation, the servers were allegedly repacked in unmarked boxes.
Authorities claim the total value of server sales grew to $2.5 billion, with the Southeast Asian company becoming one of Supermicro’s biggest customers, ranking 11th globally in fiscal 2024 with $99.7 million in revenue. Throughout this period, Liaw was allegedly directing activities behind the scenes.
In January 2025, when new AI export restrictions were announced, Liaw allegedly texted an executive at the Southeast Asian company, urging them to “speed these up before May 13!” He later texted again, “We can ship all your 512 x B200 by Feb.
Let us run fast before May 13!” referring to the Nvidia GPUs.
The indictment notes that as orders continued, the accused allegedly worked harder to maintain secrecy. When Supermicro’s compliance team started an audit in late 2024-a period when the company faced auditor resignation, a DOJ investigation, and risk of delisting by Nasdaq-Chang allegedly arranged for a “friendly” auditor employed by Supermicro to conduct the inspection.
When a more rigorous audit was set for August 2025, Sun and Chang allegedly staged hundreds of “dummy” servers, defined as non-working physical replicas in Supermicro boxes, at the Southeast Asian company’s warehouses. During this audit, Supermicro’s compliance worker was allegedly off-site “enjoying entertainment” on the Southeast Asian company’s dime.
In December 2025, when a BIS inspector conducted a post-shipment verification check, Sun allegedly set up the dummy servers again, using a hair dryer to peel off labels and serial-number stickers, which was captured on surveillance cameras. Authorities say Sun allegedly introduced himself as “Michael” and claimed to work at the Southeast Asian company’s law firm while fielding questions from the federal officer.
Liaw had previously left Supermicro following an accounting scandal in 2018. He returned as an adviser in May 2021, rejoined full-time in August 2022, and was back on the board in December 2023, before his resignation this week.
On Friday, Supermicro announced the appointment of DeAnna Luna as its acting chief compliance officer. Luna joined Supermicro in 2024 as vice president of global trade and sanctions compliance.