Super Micro shares sank 33% on Friday after US prosecutors charged three people linked with the company, including its co-founder, with helping smuggle billions of dollars worth of AI technology to China.
US prosecutors did not name Super Micro — a major AI server builder using Nvidia’s chips — in the complaint. The company confirmed it was not named as a defendant in the case, and said it had cooperated with investigators.
Super Micro’s revenue could face “enormous” risk as customers reassess supplier exposure, analysts at Melius Research said, adding that it sees Dell as the primary beneficiary given its scale and closer ties with Nvidia. Dell’s shares were up 6%.
The US Justice Department charged Super Micro co-founder Yih-Shyan Liaw, sales manager Ruei-Tsang Chang, and contractor Ting-Wei Sun with running a scheme to route US-made servers through Taiwan to Southeast Asia. There, the products were repackaged into unmarked boxes and smuggled into China.
They allegedly moved at least $2.5 billion in US AI technology, including over half a billion dollars’ worth shipped between April and mid-May 2025, the department said.
Super Micro has placed the employees on leave and ended its relationship with the contractor.
The US imposed chip export controls in 2022 to make sure Beijing’s military would not benefit from its technology, and to slow the development of China’s AI efforts.
“Investors would think about the possibility of risks that at least may result in further investigation, audits, costs, negative reputation, customers avoiding potential scrutiny, and Nvidia favoring more other server makers,” said Hendi Susanto, a portfolio manager at Gabelli Funds, which holds a stake in Super Micro.
Soaring demand for AI chips had sent Super Micro’s valuation to a peak of $67 billion in 2024, but margin pressure from building the servers and allegations from the now-disbanded short-seller Hindenburg have since dragged the stock lower.
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