Super Micro Computer’s senior executive and two associates were charged Thursday with conspiring to smuggle computer servers containing advanced Nvidia chips to China, according to an indictment unsealed in Manhattan federal court. Prosecutors said the scheme targeted U.S. export controls governing the sale and diversion of high-performance AI hardware and relied on methods they described as designed to evade review.
Federal investigators and prosecutors said the men violated the export controls by diverting servers assembled in the United States to China between 2024 and 2025. The indictment describes the effort as involving fabricated documents, staged bogus equipment intended to pass audit inventories, and the use of a pass-through company meant to conceal both misconduct and the true clientele list, according to statements cited by the report.
In remarks accompanying the case, FBI Assistant Director in Charge James C. Barnacle Jr. said the defendants used fabricated documents, staged equipment to pass audit inventories and used a pass-through company to conceal their conduct and true customers. U.S. Attorney Jay Clayton said schemes like the one alleged pose “a direct threat to U.S. national security.”
The defendants named in the charge included Yih-Shyan “Wally” Liaw, 71, described as a senior vice president and board member of Super Micro Computer, and Ting-Wei “Willy” Sun, 44, described as a company contractor. Authorities said Ruei-Tsang “Steven” Chang, a sales manager for the company in Taiwan, remains a fugitive. Liaw was arrested in California and released on bail, while Sun was arrested and held for a bail hearing Friday, authorities said.
According to the indictment, Liaw and Chang directed executives of a company in Southeast Asia to place orders for servers totaling $2.5 billion from San Jose, California-based Super Micro Computer between 2024 and 2025. The indictment said the diversion effort became more brazen over time, with at least $510 million worth of Super Micro servers diverted to China after their assembly in the United States.
The report said the court papers did not identify the company referenced in the allegation. Super Micro Computer Inc. later issued a statement that identified how the arrested men were affiliated with the company, while saying it was not indicted.
In the company’s statement, Supermicro said the conduct 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. The company also said it has a “robust compliance program” and is committed to full adherence to applicable U.S. export and re-export control laws and regulations, adding that it was not indicted and that it has been cooperating fully with the government’s investigation.
Nvidia also issued a statement saying it takes “strict compliance” as a top priority. Nvidia said it works closely with customers and the government on compliance programs as export regulations have expanded, and the company said unlawful diversion of controlled U.S. computers to China is a losing proposition across the board, adding that it does not provide service or support for systems involved and that enforcement mechanisms are “rigorous and effective.”
The case arrives amid ongoing U.S.-China competition over artificial intelligence hardware, the report said. It noted that U.S. restrictions imposed under President Joe Biden on the sale of Nvidia’s chips to China have been maintained by the Trump administration’s approach, with the Trump administration loosening the ban in exchange for a 15% commission paid to the U.S. government for some lower-tier chips—though Nvidia still did not forecast China sales in its most recent revenue report released late in February.
Even with no China sales, the report said Nvidia’s market value has risen sharply over about three years, and it cited comments from Nvidia CEO Jensen Huang earlier this week predicting the AI chip market will continue expanding, including a forecast of a $1 trillion backlog in chip orders.