Taiwan indicts Nvidia manager after chip smuggling probe

[HONG KONG] Taiwanese prosecutors indicted a senior Nvidia manager as part of a group that allegedly smuggled advanced AI chips into China, according to people familiar with the matter, advancing the island democracy’s first known crackdown on the black market trade of such accelerators.

Nvidia’s employee, surnamed Chang, is alleged along with eight others to have organised the shipment of 74 servers containing high-end B300 chips into China via Japan and Indonesia, circumventing US trade restrictions.

Bloomberg was unable to reach him after he was initially detained in July.

The group attempted to also smuggle another 56 servers, which were seized by Taiwanese authorities, according to the indictment.

Besides the Nvidia worker, Taiwan indicted two senior employees of Super Micro Computer, which manufactured the hardware in question, said the people, who asked not to be named in order to identify defendants that the indictment did not name in full. 

The group “colluded vertically and horizontally for exorbitant profits, illegally exporting high-end servers, increasing corporate compliance costs, and severely damaging Taiwan’s international image”, the Keelung District Prosecutors Office said in a statement on Monday (Aug 24).

Super Micro said it has been working with Taiwanese authorities on the smuggling probe.

“The company continues to cooperate with Taiwan authorities, is not a target of their investigation and has not been accused of any wrongdoing,” Super Micro said in a statement.

Washington has long restricted China from buying American artificial intelligence chips, but companies there have still managed to get their hands on the coveted accelerators through a sophisticated black market.

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US officials have alleged that billions of dollars’ worth of Nvidia hardware has made its way to China over the past few years. 

“Our employees have every incentive to work diligently with customers to ensure compliance with all applicable laws,” an Nvidia spokesperson said. “We will work with the Taiwan authorities to help them resolve the allegations as quickly as possible.”

Shadow trade

Taiwan’s case, while on a much smaller scale, may be the first known example of an Nvidia employee facing legal action for their alleged role in the shadow trade.

The island is indispensable to Nvidia’s chipmaking and product development, with close partner Taiwan Semiconductor Manufacturing at the head of a sprawling supply chain ecosystem.

Prosecutors are seeking five years for Nvidia manager Chang – who they described as the “core figure” in the scheme – for forgery and breach of trust, according to the people.

Taiwan has not accused Nvidia as a company of any wrongdoing.

While its chief executive officer Jensen Huang has previously said he has seen no evidence of AI chip smuggling, the world’s most valuable publicly traded enterprise has softened its tone as prosecutors from the US to Asia take multiple cases to court. 

“Smuggling is a nonstarter,” an Nvidia spokesperson said in a statement after Chang was first detained in July, without commenting on his detention or employment status in particular.

“We primarily sell our products to well-known partners, including OEMs, who help us ensure that all sales comply with US export control rules,” they said at the time, referring to original equipment manufacturers.

OEMs like Super Micro assemble Nvidia chips into servers, which are installed by the thousands in data centres used to train and run AI models.

Earlier this summer, after Taiwan prosecutors detained two Super Micro employees and restricted two others from leaving the island as part of their probe, Super Micro said that it has “zero tolerance for anyone who violates the law”.

The firm had placed all four employees on leave pending the outcome of Taiwan’s investigation.

Beyond the Nvidia and Super Micro staff, Taiwan has indicted senior-level employees from four other firms, according to the people.

Those are Albatron Technology, a reseller of Super Micro equipment; Flying Tiger, the purported end user of the allegedly smuggled Nvidia hardware; and two additional companies that helped arrange Chinese customers and facilitate the actual shipment.

The former two companies did not immediately respond to requests for comment, while Bloomberg was unable to reach the latter pair.

Prosecutors suspect the scheme worked as follows, according to people familiar with the unidentified parties from the indictment. Bloomberg has not independently confirmed this fact pattern, which remains an allegation until proven in a court of law.

The scheme began in February 2025, when top executives at Flying Tiger – the company’s owner and general manager – set up a company in Japan “intended to serve as a transit point” for smuggled hardware, the indictment said.

They then managed through “unidentified means” to get Flying Tiger on a whitelist of companies that Nvidia has approved to purchase its chips, according to the document.

The duo worked with a senior sales director at Super Micro, the general manager of Albatron, and a project manager at Taiwanese data centre operator Chief Telecom to create the “false appearance” that Flying Tiger had leased sufficient space at Chief Telecom’s facility to house the hardware they planned to buy.

They contacted Nvidia’s Chang to apply for the allocation. 

But there was a big hurdle they had to clear, the indictment said: Super Micro’s Taiwan subsidiary will not sell servers to a company that has not passed checks by its staff and Nvidia’s – including an in-person audit for sales of eight units or more.

So, in September, Nvidia’s Chang and one of the indicted Super Micro employees accompanied “unsuspecting” staff from their respective Taiwan offices on a visit to Chief Telecom, and deliberately concealed that Flying Tiger had not, in fact, leased sufficient space for the servers.

Chang then told Nvidia executives that an on-site inspection had been completed, seeking approval for Flying Tiger’s order.

Super Micro agreed to sell 130 servers to Flying Tiger, which were delivered in three phases. 

In early 2026, a group of the defendants arranged to sell 40 of those servers to one unnamed Chinese customer, split between a direct shipment to China and one routed via Indonesia – all under Flying Tiger’s name. 

Another 34 servers were exported by a company called Long Wins, which had gotten involved via a relationship with the second indicted Super Micro manager.

This hardware was split between Indonesia and Japan on its way to a second Chinese company whose purchase Long Wins had arranged. 

Taiwan authorities uncovered the scheme before Flying Tiger tried to export the remaining 56 servers to Japan with false documents.

Jensen Huang landed in Taipei a few days after that action. At the time, Taiwan authorities had only detained three individuals and said that they had seized an unspecified number of Super Micro servers containing Nvidia chips.

Nvidia’s CEO, asked by a reporter whether there was anything his company could do to prevent situations like this from happening, said Nvidia is “rigorous” in explaining the rules – and that the burden fell on Super Micro to step up its game.

Super Micro responded that its policies are aligned with the likes of Nvidia and called for industry-wide solutions. BLOOMBERG