Super Micro Shares Drop 28% After U.S. Charges Co-Founder With Smuggling AI Chips to China
The U.S. Justice Department charged Super Micro's co-founder and two others with running a scheme to route American-made servers through Taiwan and Southeast Asia before smuggling them into China. Super Micro shares fell 28% on Friday, erasing more than $5 billion in market value.
Prosecutors charged co-founder Yih-Shyan Liaw, sales manager Ruei-Tsang Chang, and contractor Ting-Wei Sun with moving at least $2.5 billion in U.S. AI technology. The defendants allegedly repackaged unmarked servers and sent them to China, with over $500 million shipped between April and mid-May 2025 alone.
Super Micro was not named as a defendant in the complaint. The company said it cooperated with investigators, placed the charged employees on leave, and ended its relationship with the contractor.
Market and Policy Implications
The charges underscore enforcement of U.S. export controls imposed in 2022 to prevent China's military from accessing advanced technology and to slow its AI development.
Analysts at Melius Research said Super Micro's revenue faces "enormous" risk as customers reassess supplier exposure. Dell, which competes in the AI server market, saw shares rise 6% as investors shifted confidence to larger competitors with closer ties to chip maker Nvidia.
Portfolio manager Hendi Susanto at Gabelli Funds, which holds Super Micro stock, said investors now worry about further investigations, audits, reputational damage, and the possibility that customers will avoid the company to escape regulatory scrutiny.
Context
Super Micro's stock reached a $67 billion valuation in 2024 as AI chip demand soared. The company has faced margin pressure from server manufacturing costs and prior allegations from short-seller Hindenburg Research, which disbanded in 2024.
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