U.S. Charges Three Individuals in Nvidia Chip Smuggling Scheme to China

The U.S. Attorney's Office for the Southern District of New York has charged three individuals associated with Super Micro Computer Inc. for allegedly conspiring to illegally divert at least $2.5 billion worth of Nvidia-powered servers to China. The indictment, unsealed on March 19, 2026, names Yih-Shyan "Wally" Liaw, Ruei-Tsan "Steven" Chang, and Ting-Wei "Willy" Sun, who are accused of violating the Export Control Reform Act. The servers in question are subject to strict U.S. export controls that prohibit their sale to China without a license, aimed at protecting U.S. national security interests.

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According to the indictment, the defendants orchestrated a complex scheme to smuggle the servers through a Southeast Asian company, which acted as a middleman. This company allegedly created fake documentation to disguise the true destination of the servers. The indictment states that the defendants used "dummy" servers to mislead Super Micro's compliance team and even during inspections by U.S. export control officials. The scheme reportedly generated approximately $2.5 billion in sales for Super Micro since 2024, with around $510 million sold to the Southeast Asian company between late April and mid-May 2025.

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Super Micro, while not named as a defendant, has placed Liaw and Chang on administrative leave and terminated its relationship with Sun. The company emphasized its commitment to compliance with U.S. export laws, stating, "The conduct by these individuals alleged in the indictment is a contravention of the Company's policies and compliance controls." Following the indictment, Super Micro's stock fell by 12% in after-hours trading, reflecting investor concerns over the legal implications and potential damage to the company's reputation.

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Critics have raised concerns about the implications of this case for U.S. national security and the integrity of export controls. Jay Clayton, the U.S. Attorney for the Southern District of New York, remarked, "Crimes involving sensitive technology must be met with swift action; otherwise, the law is meaningless." The case highlights ongoing tensions regarding the export of advanced technology to China, particularly in the realm of artificial intelligence, where U.S. companies face increasing competition from Chinese firms.

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While the indictment details the alleged actions of the defendants, it does not specify which Nvidia chips were involved in the scheme. Furthermore, there are discrepancies regarding the extent of Super Micro's knowledge of the activities, as the company asserts its compliance efforts while the indictment suggests extensive measures to conceal the smuggling.

Super Micro Computer stock price crashes 12% in post-market hours; here's why

• “The defendants participated in a systematic scheme to divert massive quantities of US artificial intelligence technology to customers in China,” — Jay Clayton, U.S. Attorney

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• “Strict compliance is a top priority for Nvidia,” — Nvidia spokesperson

Super Micro Computer stock price crashes 12% in post-market hours; here's why

• “The conduct by these individuals alleged in the indictment is a contravention of the Company's policies and compliance controls, including efforts to circumvent applicable export control laws and regulations,” — Super Micro statement

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This case underscores the complexities of U.S. export regulations and the ongoing challenges in preventing the unauthorized transfer of sensitive technology to foreign entities.

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