The stock of Super Micro Computer (SMCI) is down more than 25% after the company was accused of smuggling restricted microchips and servers into China.
The U.S. government has charged a co-founder of Super Micro Computer and two other individuals with involvement in a plan to divert U.S.-made servers and chips to China in violation of export-control laws.
According to the charges, the three individuals who worked for Super Micro Computer transported artificial-intelligence (A.I.) servers that contained restricted Nvidia (NVDA) microchips into China.
In all, about $2.5 billion U.S. worth of restricted servers and processors were illegally shipped to China, said the U.S. Justice Department in its criminal filing against Super Micro Computer.
One of the people charged in the scheme is Yih-Shyan “Wally” Liaw, who is currently a senior vice president of business development, co-founder, and board member at the company.
The other two people charged are a sales manager in Taiwan named Ruei-Tsang “Steven” Chang and a contractor named Ting-Wei “Willy” Sun.
Super Micro Computer said it placed its two employees on leave and fired the contractor after learning of the U.S. government charges. The company itself hasn’t been charged with any wrongdoing.
Super Micro Computer also said that it is cooperating with the government’s investigation.
Still, the reaction to the scandal has been swift, with SMCI stock down 27% in premarket trading on March 20.
This is not the first time Super Micro Computer has been in a controversy. In 2024, the company ran into trouble over its accounting practices and a delay in filing its annual report with U.S. regulators.
Prior to March 20, SMCI stock had declined 21% over the last 12 months to trade at $30.79 U.S. per share.
Tech Insider
