- Three men indicted for exporting restricted AI chips to China
- The men were employees of Super Micro Computer Inc.
- The program generated $2.5 billion in sales, bypassing restrictions on Power AI GPUs.
A federal investigation was launched after the US Department of Justice indicted three people for allegedly smuggling restricted Nvidia AI chips to China.
The three men were not named in court documents, but a statement released by Super Micro Computer Inc. identified those involved.
The smuggling is believed to have taken place between 2024 and 2025, with billions of dollars worth of computer servers containing advanced Nvidia processors making the journey to China.
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The brains behind this $2.5 billion project
Of the three men charged, two were arrested. Yih-Shyan “Wally” Liaw, a senior vice president and board member of Supermicro, was arrested in California, while Ting-Wei “Willy” Sun, a Supermicro contractor based in Taiwan, was also arrested. The third man, Ruei-Tsang “Steven” Chang, worked for Supermicro’s Taiwan office and is currently on the run.
Supermicro released a statement on the arrest of the three men. “The conduct of these individuals alleged in the indictment constitutes a violation of the Company’s policies and compliance controls, including efforts to circumvent applicable export control laws and regulations,” the company said. “Supermicro maintains a robust compliance program and is committed to fully complying with all applicable U.S. export and re-export control laws and regulations.”
The smuggling scheme reportedly generated $2.5 billion in sales, with the trio successfully diverting more than $510 million worth of Supermicro servers to China. The servers were allegedly ordered by a Southeast Asian “middleman” company (listed in the indictment as Company-1) to appear as legitimate transactions, before being repackaged and shipped to China.
Providing China with cutting-edge technologies
Supermicro servers largely contained Nvidia H100 and H200 Tensor Core GPUs, specifically designed to train and manage large language models (LLM).
The indictment further states that, in order to maintain China’s supply of the latest technologies, Liaw allegedly pushed Company 1 to place larger orders, including servers containing Nvidia’s B200, one of the most advanced GPUs at the time.
The climax of the US-China chip war
The United States has imposed restrictions on the types of GPUs that companies are allowed to export to China since October 2022. The primary goal of these restrictions was to maintain American superiority in AI development, while simultaneously preventing China from building powerful models that could be used for codebreaking, autonomous weapons systems, and cyberwarfare.
To monitor enforcement of these restrictions, physical inspections took place to ensure that servers were not being smuggled into China. However, the three individuals allegedly organized “dummy” servers packaged with Supermicro labels and boxes, while the original contents of these same boxes were already shipped to China.
Bypass restrictions
As this case shows, export restrictions are only as effective as their physical inspections. Although the indictment does not explain the process of a physical inspection, it does indicate that an audit took place in August 2025. However, the indictment further states that the person responsible for conducting the audit was allegedly off-site enjoying entertainment paid for by Company-1.
To complete the audit, Sun allegedly sent the auditor photos and videos of the fake servers, along with their fake labels. The US Bureau of Industry and Security (BIS) subsequently informed Supermicro that Company 1 was diverting its orders to China and that a second audit was planned. The second audit again involved dummy servers and led BIS to suspend shipments from Company 1.
Since January 2026, restrictions on the export of H200 chips to China have been lifted, but customers must ensure “sufficient security procedures”, with approved exports subject to a 25% tax. However, B200 chips remain strictly prohibited.
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