Super Micro raided as Taiwan expands chip smuggling probe

[TAIPEI] Super Micro Computer’s offices in Taiwan were raided by government authorities on Monday (Jun 29), widening an investigation into the alleged smuggling of Nvidia chips into China using the company’s servers, according to a person familiar with the situation. Super Micro’s shares fell as much as 9.2 per cent.

Local investigators raided the residences of six individuals and the sites of three affiliated companies on Monday as part of the ongoing probe into allegedly illegal exports of Super Micro’s servers, Taiwan’s Keelung District Prosecutors Office said in a statement.

While prosecutors declined to provide names of those searched, Super Micro’s Taiwan office was among them, a person familiar with the situation said, asking not to be identified because the information isn’t public. Super Micro, which has previously said it is cooperating with Taiwanese authorities on the probe, did not immediately respond to a request for comment.

Super Micro said in a statement that it’s working closely with Taiwanese authorities. “Super Micro is committed to protecting our advanced technologies and intellectual property,” the firm said. “Super Micro products continued to be targeted in these matters, and we continue to cooperate with law enforcement and government officials in Taiwan and other jurisdictions in which we operate to ensure our technology is distributed as lawfully intended.”

The move marks an expansion of Taiwan’s first public crackdown on AI chip diversion after years of pressure from Washington to take a more active role in curtailing China’s tech access. The US has for years restricted exports of advanced AI chips to China over concerns that the hardware, the vast majority of which is produced in Taiwan, could benefit Beijing’s military efforts.

Super Micro shares were down 8 per cent to US$28.17 at about 3pm in New York on news of the raid.

Taiwan does not currently treat AI chip exports to China as a crime. While Taiwan authorities do warn potential sellers that they may be breaking US rules should they proceed, the only legal recourse through the island’s courts is to charge suspected smugglers with violations of other, existing local laws. Taipei is now considering criminalising exports themselves, which would give local prosecutors more tools to go after the illicit trade.

Authorities made their first known detentions of alleged chip smugglers in May, on charges of falsifying documents related to exports of Super Micro servers containing highly priced Nvidia AI chips. The three individuals were suspected of successfully sending at least one batch of Nvidia’s AI chips to China via Japan, Bloomberg News has reported, and attempting to export around 50 servers that Taiwan authorities seized before they left the island.

Taiwanese data centre operator Chief Telecom and Super Micro distributor Albatron Technology were also raided on Monday, the person familiar with the investigation said. Taiwanese outlets including the Liberty Times newspaper reported on the names of the companies searched earlier on Monday.

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Chief Telecom did not have immediate comment. Albatron said in an exchange filing that it was searched by local investigators earlier on Monday, without providing details about why it was targeted. The company said there was no financial or operational impact.

Taiwan’s Keelung District Prosecutors Office said in its statement that it has also summoned the individuals searched on Monday for interviews.

Taipei is considering fortifying its export controls on AI chips sales to China to better align with the US, Bloomberg has reported. That would give Taiwan prosecutors more tools to crack down on illicit trade of AI hardware, which is manufactured in bulk on the island. Both Nvidia and Advanced Micro Devices rely on Taiwan Semiconductor Manufacturing to make their cutting-edge AI chips. BLOOMBERG