A federal grand jury indicted three men connected to Super Micro Computer, Inc. (SMCI) on March 19 for allegedly diverting approximately $2.5 billion worth of AI servers to China in violation of U.S. export control laws, the U.S. Attorney’s Office for the Southern District of New York announced.
The defendants are Yih-Shyan “Wally” Liaw, 71, Supermicro’s co-founder, board member, and Senior Vice President of Business Development; Ruei-Tsang “Steven” Chang, 53, the company’s Taiwan general manager; and Ting-Wei “Willy” Sun, 44, a third-party broker. Liaw, a U.S. citizen, and Sun, a Taiwanese citizen, were arrested in the Northern District of California. Chang, also a Taiwanese citizen, remains a fugitive.
The indictment, filed in Manhattan federal court and assigned to U.S. District Judge Edgardo Ramos, alleges Liaw and Chang directed executives at an unnamed Southeast Asian company to order servers from Supermicro under false pretenses.
After assembly in the United States, the servers were shipped to Supermicro’s Taiwan facilities, transferred to the Southeast Asian company, repackaged in unmarked boxes, and forwarded to buyers in China. The servers incorporated Nvidia graphics processing units (GPUs) subject to Commerce Department export license requirements.
Between late April and mid-May 2025 alone, roughly $510 million worth of servers were diverted, according to the indictment.
To pass audits, the defendants staged thousands of non-functioning replica servers at warehouse locations where the real hardware was supposed to be stored, prosecutors said. Surveillance footage recorded Sun and an unnamed broker using a hair dryer to remove and reaffix serial-number stickers on the dummy units before a Commerce Department inspection.
“They did so through a tangled web of lies, obfuscation, and concealment — all to drive sales and generate revenues in violation of U.S. law,” U.S. Attorney Jay Clayton said. “Diversion schemes like those disrupted today generate billions of dollars in ill-gotten gains and pose a direct threat to U.S. national security.”
Each defendant faces a maximum of 20 years in prison on a charge of conspiring to violate the Export Controls Reform Act (ECRA), and up to five years each on charges of conspiring to smuggle goods from the United States and conspiring to defraud the United States.
Supermicro said the company is not named as a defendant and is cooperating with the investigation. The company placed Liaw and Chang on administrative leave and terminated Sun’s contracting role. Liaw resigned from the board effective March 20.
Nvidia stated that compliance is a “top priority” and that it does not provide service or support for unlawfully diverted systems.
SMCI shares fell more than 33% on March 20. Dell Technologies shares rose approximately 4.5%, with analysts at Wells Fargo, Wedbush, and Melius Research identifying Dell as the most likely beneficiary of any customer shift away from Supermicro.
The charges are accusations. All three defendants are presumed innocent unless and until proven guilty.
