March 20 (Reuters) – Super Micro shares sank 27% on Friday after U.S. prosecutors charged three people linked with the company, including its co-founder, with helping smuggle billions of dollars worth of AI technology to China.
The drop in early morning trading would erase nearly $5 billion from Super Micro’s $18.49 billion market value if the losses hold.
U.S. 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.
The U.S. Justice Department charged co-founder Yih-Shyan Liaw, sales manager Ruei-Tsang Chang, and contractor Ting-Wei Sun with running a scheme to route U.S.-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 U.S. 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.
Bernstein analysts said the charges raise “serious credibility issues that could impact business”.
“We wonder if Nvidia might feel the need to further distance themselves from SMCI. If so, this could impact SMCI’s important supply of GPUs, which in turn could have devastating impact on SMCI,” the analysts said.
The U.S. 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.
San Jose, California-based Super Micro earlier said the restrictions impacted certain products, including those that contain the Nvidia A100 and H100 integrated circuits.
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.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Leroy Leo)
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