Super Micro Dives As U.S. Accuses Execs Of Smuggling Nvidia Chips To China

Federal prosecutors accused Super Micro Computer (SMCI) executives of illegally smuggling AI servers with advanced Nvidia (NVDA) chips into China. Super Micro stock crashed Friday.

The U.S. Attorney’s Office for the Southern District of New York alleged  Yih-Shyan “Wally” Liaw, Ruei-Tsan “Steven” Chang and Ting-Wei “Willy” Sun of working to violate the Export Control Reform Act. Thursday’s unsealed indictment did not name the company they work for.

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However, Super Micro Computer, better known as Supermicro, confirmed in a Thursday evening release that the three people are associated with the server maker. “Wally” Liaw is a Supermicro co-founder, a board member and senior vice president of business development. “Steven” Chang is a sales manager while “Willy” Sun is  a contractor.

Liaw and Chang have been placed on administrative leave while Supermicro has cut ties with Sun.

Late Friday, Super Micro announced that Liaw had stepped down from its board of directors. The company also named DeAnna Luna as acting chief compliance pfficer.

Supermicro said it’s cooperating fully with the government and has not been named as a co-defendant.

Super Micro Stock

Super Micro stock dived 33.3% to 20.53 on Friday, the lowest since late 2024, when the company was reeling from accounting concerns. SMCI stock hit a 52-week high of 62.36 on July 30 and a record 122.90 in March 2024.

SMCI stock rose modestly late Friday after announcing Liaw’s board exit.

Nvidia stock fell 3.15% on Friday, below its 200-day moving average. Shares climbed less than 1% after the close.

Dell Technologies (DELL) edged up 0.6% on Friday. Shares initially jumped Friday on bets that Dell will benefit from Supermicro’s woes, but faded with the market. Dell stock rallied 5.1% to 156.76 on Thursday, retaking a breakout buy point.

Dell stock edged higher late Friday.

Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson  for stock market updates and more.

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