Taiwanese prosecutors have launched a compulsory investigation involving the Taiwan office of U.S. server maker Super Micro Computer over allegations of smuggling Nvidia AI semiconductors into China.
The Keelung District Prosecutors Office said Monday it had searched the residences of six individuals and three companies as part of an investigation into the alleged illegal export of Supermicro servers. Prosecutors did not disclose the names of the companies searched, but Supermicro's Taiwan office was reportedly among them.
California-based Supermicro issued a statement saying it is "working closely with Taiwanese investigative authorities." The company said it "strives to protect advanced technology and intellectual property rights, and continues to cooperate with judicial authorities in Taiwan and other countries to ensure that technology is distributed in accordance with the law." Following the news, Supermicro shares fell 8% on the New York Stock Exchange, Bloomberg reported.
The raid marks Taiwanese authorities' first public investigation related to the leakage of AI semiconductors to China. The United States has restricted exports of advanced AI semiconductor technology to China and has pressed Taiwan to block such access as well.
Shares of other companies reportedly searched by prosecutors also fell sharply. Prosecutors are said to have searched data center operator Chief Telecom and Supermicro distributor Albatron Technology during the investigation. Albatron's shares plunged 10% on the Taipei stock exchange, while Chief Telecom fell more than 2%.
In Taiwan, the act of exporting AI semiconductors to China is not currently subject to criminal punishment. When Taiwanese authorities arrested a chip smuggling suspect last month, the charge applied was forging export documents for Supermicro servers equipped with Nvidia AI chips. However, the Taiwanese government is reviewing a plan to classify the export of AI semiconductors to China as a crime. If the law is revised, investigative and enforcement powers are likely to be expanded.
Earlier in March, the U.S. Department of Justice indicted three people, including Supermicro co-founder Liao Yih-Shyang, a Taiwanese-American, and sales manager Chang Jui-Tsang. The Justice Department believes they helped forge documents to disguise the actual destination of AI servers bound for China as being headed for Southeast Asia.
"Supermicro itself is not a direct suspect in this case, but related risks have continued since the co-founder was indicted on charges of smuggling Nvidia GPUs into China," said Woo Jin Ho, an analyst at Bloomberg Intelligence (BI).
