Super Micro Co-Founder Exits Board As Nvidia Chip Smuggling Indictment Batters Stock

Super Micro Computer, Inc’s (NASDAQ:SMCI) co-founder, Yih-Shyan “Wally” Liaw, has resigned from the server maker’s board after a federal indictment accused him of smuggling equipment loaded with Nvidia’s (NASDAQ:NVDA) AI chips into China — a scheme that allegedly generated $2.5 billion in sales since 2024 in violation of U.S. export controls. What The Indictment Alleges A U.S. court unsealed the indictment Thursday, naming Liaw — Super Micro’s senior vice president of business development, alongside general manager Ruei-Tsan “Steven” Chang and contractor Ting-Wei “Willy” Sun. Prosecutors allege the trio used a Southeast Asian company as a middleman, which generated fake paperwork suggesting it was the end user of the servers. A separate logistics firm then repackaged the hardware to conceal its destination before it was shipped on to China. The defendants also allegedly deployed “dummy” servers at the Southeast Asian company’s facilities to deceive Super Micro’s compliance team, and used the same tactic during a visit from a U.S. export control officer. Super Micro did not hold a Commerce Department license to export servers featuring Nvidia GPUs to China. Super Micro said it placed Liaw and Chang on administrative leave and has ceased working with Sun. The board now comprises eight directors with no changes to the committee structure, the company said late Friday. The company also named DeAnna Luna — a former Intel (NASDAQ:INTC) executive who joined Super Micro in 2024 as vice president of global trade and sanctions compliance — as its acting chief compliance officer. Shares Take A Hit Super Micro shares plunged more than 33% on Friday, to a 52-week low, as investors digested the scope of the alleged scheme. The stock gained 1.86% to $20.91 in trading after the bell, according to Benzinga Pro data. Benzinga Edge Rankings showed SMCI’s Quality score at 97.72 and Value at 79.67, though Momentum cratered to 14.43 — with the stock’s Price Trend flashing negative across short, medium and long timeframes. What Happens Next? Liaw made his initial court appearance on Thursday and was released on an unsecured bond, with a bond hearing set for Wednesday. Sun’s initial hearing was held on Friday, with his detention hearing scheduled for Monday afternoon. Image via Shutterstock