Super Micro Computer co-founder Yih-Shyan "Wally" Liaw pleaded not guilty on Wednesday in a Manhattan federal court to charges that he helped illegally divert billions of dollars' worth of Nvidia-powered servers to China, Bloomberg reported. Co-defendant Ting-Wei "Willy" Sun, an outside contractor described by prosecutors as a "fixer" in the smuggling scheme, also entered a not-guilty plea at the hearing before U.S. District Judge Edgardo Ramos.
Liaw has been released on a $5 million bond, while Sun's lawyer told the judge that he's negotiating a bail package with prosecutors. The third defendant, Ruei-Tsang "Steven" Chang, a former general manager in Super Micro's Taiwan office, is not in U.S. custody. Judge Ramos set a November 2 trial date for the case.
Federal prosecutors allege that Liaw, Chang, and Sun conspired to sell U.S.-assembled servers containing Nvidia's export-controlled AI chips to Chinese customers through an unidentified Southeast Asian pass-through company. The case is the highest-profile prosecution yet in the U.S. government's crackdown on the alleged smuggling of restricted AI chips to China.
The scheme reportedly involved swapping serial number stickers from real servers onto non-functioning dummy units using heat guns, then shipping the genuine hardware onward to China with fabricated paperwork. CCTV footage captured workers using heat guns to swap the serial numbers at a Southeast Asian warehouse. Prosecutors estimate the operation generated roughly $2.5 billion in sales since 2024, with shipments between April and May 2025 alone being valued at over $500 million.
The charges, unsealed on March 19, immediately hammered Super Micro's stock price, erasing more than $6 billion from the company's market cap, with the stock falling roughly 33% in a single session. Liaw has since resigned from Super Micro's board of directors.
Super Micro itself isn’t named as a defendant in the indictment, but acknowledged that the three accused individuals are "associated" with the company in an official statement. The server maker called the alleged conduct a violation of its internal policies and said it maintains a compliance program covering U.S. export and re-export control laws. Nvidia also distanced itself from the scheme, telling Tom's Hardware that strict compliance is a priority and that it does not provide service or support for unlawfully diverted systems.
U.S. Senators Jim Banks and Elizabeth Warren wrote to Commerce Secretary Howard Lutnick, urging a pause on all active export licenses for advanced Nvidia AI chips headed to China and Southeast Asian intermediaries. Shareholders have also filed a securities fraud lawsuit against Super Micro, alleging the company concealed its dependence on revenue from illicit sales.
