Supermicro has spent the past three years riding the AI wave in Silicon Valley but before the recent allegations involving a co-founder smuggling Nvidia chips, it previously ran afoul of export-control regulations.
The hardware manufacturer’s co-founder, Yih-Shyan “Wally” Liaw, was charged on Thursday with conspiring to smuggle about $2.5 billion worth of highly coveted Nvidia GPUs in servers to China. Prosecutors claim that Liaw, along with Supermicro’s Taiwan general manager Ruei-Tsang “Steven” Chang, and a “fixer” named Ting-Wei “Willy” Sun, routed servers with banned Nvidia H200 and B200 GPUs through an unnamed Southeast Asian company to Chinese buyers who wanted the chips. Authorities arrested Liaw and Sun this past week. Chang remains a fugitive, according to the Department of Justice. The company has not been accused of wrongdoing, and neither have co-founders Charles Liang, who is the CEO and chairman, nor his wife, Sara Liu, a board member and co-founder.
In a statement Supermicro said Liaw resigned his board seat on Friday, and he remains on administrative leave, along with Chang. Sun was fired. Supermicro’s stock plummeted in trading on Friday, giving short sellers who have collectively bet $2.6 billion against the company a windfall. Shorts collected an estimated $860 million in single-day gains after the stock sank 33%, according to financial data firm S3 Partners. The day pushed their March gains to nearly $1 billion. Supermicro has said it is cooperating with law enforcement and it was not named in the indictment.
However, this isn’t Supermicro’s first brush with this type of export-control violation.
