Taiwanese prosecutors recently raided the local offices of Super Micro Computer, along with the residences of six individuals and two affiliated companies, as part of an expanding probe into the alleged smuggling of Nvidia AI chips to China through Super Micro's servers. This operation by the Keelung District Prosecutors Office marks a significant escalation in Taiwan's first criminal investigation into AI chip diversion, which initially began in May with the detention of three individuals. Super Micro's shares reacted sharply to the news, falling more than 9%.
The investigation focuses on allegations that Super Micro co-founder Wally Liaw and two others used forged documents to export Nvidia-equipped servers to China, reportedly routing at least one shipment through Japan. Around 50 servers were seized before they could leave Taiwan. The broader scheme, also targeted by US prosecutors, is estimated to be worth approximately $2.5 billion. Liaw has pleaded not guilty to charges from the US Department of Justice regarding a conspiracy to divert Nvidia servers to China via a Southeast Asian front company, with his trial set for November.
While Taiwan does not currently criminalize AI chip exports to China, prosecutors are pursuing suspects under existing laws, such as document forgery. Taipei is now considering legislating to directly criminalize these exports, which would provide more potent tools for combating illicit trade. The May crackdown saw Super Micro stating it collaborated with Taiwanese authorities, leading to arrests and seizures, and emphasizing its commitment to protecting its technology. CEO Jensen Huang of Nvidia has also addressed the issue, warning that diverted chips would not receive company support or repairs.
The recent raids also included Taiwanese data center operator Chief Telecom and Super Micro distributor Albatron Technology. Albatron confirmed the search, though Chief Telecom has yet to comment. Super Micro has stated it is cooperating with authorities in Taiwan and other jurisdictions, maintaining that its products are being targeted in these smuggling cases. The company itself has not been charged in the ongoing investigation.
