Supermicro co-founder arrested in $2.5B Nvidia chip smuggling scheme

SupermicroDealroom has a profile for this one. Try Dealroom →'s co-founder and senior vice president of business development, Yih-Shyan "Wally" LiawDealroom has a profile for this one. Try Dealroom →, was arrested on March 19, 2026 on charges of conspiring to smuggle $2.5 billion worth of Nvidia AI chip servers to China in violation of US export controls.

Also charged are Ruei-Tsang "Steven" Chang, a Taiwan-based Supermicro sales manager who remains a fugitive, and contractor Ting-Wei "Willy" Sun, who was arrested alongside Liaw. The indictment, unsealed in New York's Southern District, followed an FBI investigation led by US attorney Jay Clayton.

The case is the largest US enforcement action yet involving Nvidia chip smuggling — and it arrives at a pivotal moment. Export restrictions on Nvidia's AI chips have intensified under successive administrations, even as Nvidia prepares to ship its older H200 chips to China following a deal with the Trump administration in December 2025.

According to prosecutors, the alleged scheme was active and accelerating: more than $510 million of US-assembled Nvidia servers were diverted to China in a single three-week window between late April and mid-May 2025.

Supermicro is not named as a defendant, and the company has placed the two employees on administrative leave and terminated its relationship with the contractor. But the reputational damage is significant for a company already recovering from a 2024 auditing scandal that led to delayed financial disclosures and the replacement of its chief financial officer. Supermicro shares fell nearly 12% in after-hours trading following the announcement.

The alleged scheme used a south-east Asia-based intermediary as a pass-through entity, repackaging servers in unmarked boxes to disguise their contents; that intermediary became one of Supermicro's largest customers, accounting for $99.7 million in revenue in a single quarter.

The arrests follow a string of smaller chip-smuggling cases: two Chinese nationals arrested in Los Angeles in August 2024, and two Texas businessmen charged in December 2024 with $50 million in Nvidia technology seized. The Supermicro indictment dwarfs all of them — and puts every server manufacturer with sales networks near China on notice.

Sources:
Super Micro Computer, Inc.
The Financial Times
The Wall Street Journal
CNN
CNBC
BBC

J.V.