Super Micro Computer Shares Plunge 27% After Co-Founder Arrest for Chip Smuggling
Super Micro Computer shares fell 27% after co-founder Yih-Shyan ‘Wally’ Liaw was arrested for allegedly conspiring to sell billions of dollars in Nvidia-powered AI servers to China using falsified documents and tampered serial labels. The company denies involvement, cites internal compliance breaches and distances itself from Liaw and two others.
1. Co-Founder Arrest and Smuggling Allegations
Yih-Shyan 'Wally' Liaw, Super Micro Computer’s co-founder, was arrested alongside sales manager Ruei-Tsang 'Steven' Chang and contractor Ting-Wei 'Willy' Sun for allegedly conspiring to export billions of dollars in Nvidia-powered AI servers to China. The scheme reportedly involved falsified export documents and tampering with serial labels using hair dryers to bypass audits.
2. Shares Plunge and Market Impact
Super Micro Computer shares plunged 27% on Friday following news of the arrests, reflecting investor concern over potential legal liabilities and supply chain disruptions. Nvidia shares also dipped 1.5%, underscoring market anxiety over the regulatory fallout for AI hardware providers.
3. Company Response and Compliance Record
Management issued a statement denying corporate involvement, highlighting that the company was not named as a defendant and pointing to internal compliance breaches by Liaw and his co-defendants. Super Micro Computer previously faced SEC accounting charges in 2020 and a short seller report in 2024, raising questions about its governance practices.