A co-founder of Supermicro, a major US server maker, has been indicted for allegedly supplying export-controlled Nvidia GPUs, including Blackwell chips, to China in return for billions in sales.
On Thursday, the Justice Department announced it had indicted 71-year-old co-founder Wally Liaw, along with a Supermicro sales manager in Taiwan, Ruei-Tsang “Steven” Chang, and a contractor Ting-Wei “Willy” Sun for conspiring to smuggle the GPUs starting in 2024.
The US has been using export controls to prevent China from obtaining the most advanced AI chips. However, the Justice Department alleges that Liaw and Chang conspired with third-party brokers and customers in China to secretly funnel Supermicro shipments containing Nvidia B200 and H200 GPUs into the country using a “pass-through” company based in Southeast Asia.
To conceal the scheme, Liaw and Chang, along with unnamed executives at the pass-through company, created falsified documents, and even used thousands of non-working dummy servers to pretend the Supermicro shipments had ended up in Southeast Asia. Between 2024 and 2025, the pass-through company purchased $2.5 billion-worth of servers from Supermicro.
(David Paul Morris/Bloomberg via Getty Images)
Meanwhile, the dummy servers were staged in Southeast Asia and used to try and pass audits from Supermicro’s own inspectors and the US Commerce Department. However, the actual server shipments had already been sent to China without an export license.
As evidence, federal investigators uncovered surveillance footage showing the dummy servers at a warehouse in Southeast Asia. To try and fool inspectors, the Justice Department says the suspects and their accomplices were found “using a hair dryer to remove and affix labels and serial number stickers to the server boxes and to the dummy servers themselves.” The 21-page indictment also references messages sent between the suspects about the smuggling.
Get Our Best Stories!
Your Daily Dose of Our Top Tech News
By clicking Sign Me Up, you confirm you are 16+ and agree to our Terms of Use and Privacy
Policy.
Thanks for signing up!
Your subscription has been confirmed. Keep an eye on your inbox!
(DOJ)
We’ve seen Nvidia GPU smuggling cases before, but this is the first to involve a high-level executive when Liaw held the position of SVP for Business Development. Liaw actually resigned from SuperMicro back in 2018 amid accounting violation allegations, but the company later brought him back on, naming him as a board member in Dec. 2023.
The case is raising questions about whether other executives at Supermicro had any role in the scheme since the San Jose company partners with Nvidia to sell AI data center tech. The indictment notes the suspects “pressured” Supermicro’s compliance team to clear the shipments to the pass-through company in Southeast Asia. In addition, Supermicro, identified as “US Manufacturer” in the indictment, “profited significantly” from the smuggling, the court document adds.
“As the scheme progressed, Company-1 (the pass-through company) became one of the US Manufacturer’s largest customers,” the indictment says. “For the fourth quarter of its 2024 fiscal year, Company-1 ranked as the US Manufacturer’s eleventh most profitable customer worldwide-accounting for approximately $99.7 million in revenue for the quarter.”
Recommended by Our Editors
For now, Supermicro emphasized it was not named a defendant in the indictment. “Supermicro has placed the two employees on administrative leave and terminated its relationship with the contractor, effective immediately,” the company said in a statement.
“The conduct by these individuals alleged in the indictment is a contravention of the Company’s policies and compliance controls, including efforts to circumvent applicable export control laws and regulations,” the statement adds. “Supermicro maintains a robust compliance program and is committed to full adherence to all applicable US export and re-export control laws and regulations.”
Supermicro has since deleted a webpage featuring Liaw as a co-founder. He and the two other suspects now face up to 30 years of prison time if convicted of all the charges. Both Liaw and Chang have been arrested while Sun remains a fugitive.
About Our Expert
Michael Kan
Senior Reporter
Experience
I’ve been a journalist for over 15 years. I got my start as a schools and cities reporter in Kansas City and joined PCMag in 2017, where I cover satellite internet services, cybersecurity, PC hardware, and more. I’m currently based in San Francisco, but previously spent over five years in China, covering the country’s technology sector.
Since 2020, I’ve covered the launch and explosive growth of SpaceX’s Starlink satellite internet service, writing 600+ stories on availability and feature launches, but also the regulatory battles over the expansion of satellite constellations, fights with rival providers like AST SpaceMobile and Amazon, and the effort to expand into satellite-based mobile service. I’ve combed through FCC filings for the latest news and driven to remote corners of California to test Starlink’s cellular service.
I also cover cyber threats, from ransomware gangs to the emergence of AI-based malware. Earlier this year, the FTC forced Avast to pay consumers $16.5 million for secretly harvesting and selling their personal information to third-party clients, as revealed in my joint investigation with Motherboard.
I also cover the PC graphics card market. Pandemic-era shortages led me to camp out in front of a Best Buy to get an RTX 3000. I’m now following how President Trump’s tariffs will affect the industry. I’m always eager to learn more, so please jump in the comments with feedback and send me tips.
Read Full Bio
&w=1024&resize=1024,1024&ssl=1 "Governo apertará classificação indicativa de apps e jogos")
