Supermicro Co-Founder Arrested for Smuggling Nvidia AI Chips to China

The case reads like a spy thriller. A warehouse in Southeast Asia filled with fake servers. An auditor paid to look the other way. Security footage capturing the men in action the night before a government inspection.

The federal indictment, brought by the U.S. Attorney for the Southern District of New York, describes one of the most elaborate technology smuggling operations ever charged in an American court.

At the center of the case are three men tied to Super Micro Computer, one of Silicon Valley's most important AI infrastructure companies.

Who was charged?

Yih-Shyan "Wally" Liaw, 71, co-founded Supermicro in 1993 and served on the company's board. Ruei-Tsang "Steven" Chang, 53, is a sales manager at the company's Taiwan office. Ting-Wei "Willy" Sun, 44, is described as a "third-party broker and fixer."

Liaw and Sun were arrested on March 19. Chang remains a fugitive.

What are they accused of?

According to the indictment, the three built a hidden pipeline to funnel Nvidia's most powerful AI chips to China, in direct violation of U.S. export control laws.

The method was sophisticated. They used thousands of dummy servers — replicas of the originals — placed in a Southeast Asian warehouse to fool auditors. Real servers were unlawfully forwarded to China. When U.S. authorities scheduled their own inspection, the dummy servers were staged again.

The fallout

Supermicro's stock dropped over 33% in a single day. Liaw immediately resigned from the board. The company, already dealing with SEC investigations and accounting scandals, is in crisis again.

For the broader AI industry, this is a reminder that the chip war between the U.S. and China plays out not just in trade policy, but in criminal courtrooms. The case underscores the gravity of U.S. export controls on advanced semiconductor technology — Nvidia's H100 and H200 — and the national security threat posed by their reaching the wrong hands.