Super Micro Computer Co-Founder Arrested for Allegedly Smuggling Nvidia Servers to China, SMCI Plunges Over 22% Post-Market.

TradingKey - On March 20, Eastern Time, reports indicated that Super Micro Computer (SMCI) co-founder Yih-Shyan "Wally" Liaw was arrested by U.S. law enforcement on allegations of circumventing export controls to illegally transfer high-performance servers and GPUs to China.

Following the news, SMCI shares plunged more than 22% in pre-market trading.

Reports state that Liaw is accused of organizing a large-scale smuggling operation in a short period, shipping approximately $510 million worth of equipment in just three weeks during the spring of 2025, with the total scale potentially reaching $2.5 billion, including numerous server products based on Nvidia chips.

The investigation also noted that he evaded U.S. regulatory scrutiny by manufacturing "shell servers" and tampering with device serial numbers, and was even captured on surveillance using tools to swap labels while coordinating operations via encrypted communications.

Impacted by the news, Super Micro Computer's stock price dropped nearly 20% at one point in after-hours trading, as market concerns regarding compliance risks and future business prospects rapidly intensified.

Data shows that Liaw personally holds approximately $464 million in company stock; if the charges are proven, he could face a maximum of 30 years in federal prison.

Market analysis suggests that this incident comes as the U.S. continues to tighten export restrictions on high-end AI chips and related equipment; if the investigation expands, it could have spillover effects on the entire server and AI industry chain.