March 21, 2026

• less than 3 min read

Turns out, there’s a worse kind of chip-smuggling than sneaking your own snacks into the movie theater. This week, the US charged Yih-Shyan “Wally” Liaw, the co-founder of servermaker Super Micro, with illegally routing servers containing Nvidia’s advanced AI chips to China. The US restricts chip exports to the country to give American AI labs an edge.

Liaw, who resigned from the California-based Super Micro’s board yesterday, was named as a defendant alongside a general manager and a contractor. Though Super Micro wasn’t charged in the case, its stock plummeted 33% yesterday.

Sticky trickery

The three defendants allegedly orchestrated purchases of the servers by a company in Southeast Asia, which then repackaged them for shipment to China:

• Prosecutors say Super Micro made $2.5 billion in server sales to this company since 2024.
• Last spring, $510 million worth of those servers with restricted chips were sent to China.

The scheme allegedly involved tricking Super Micro auditors and a US government inspector into believing the company had bought the hardware for itself. Prosecutors say that at one point, a hair dryer was used to transfer serial-number stickers from the real servers to “dummy” servers shown to inspectors.

Despite the chip-smuggling crackdown…the Trump administration recently loosened export restrictions on some of Nvidia’s advanced chips involved in the case.—SK

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