Taiwan Indicts Nvidia Manager, Supermicro Employees for Smuggling AI Servers to China

Taiwanese prosecutors on Monday indicted nine people, including a senior manager from Nvidia’s Taiwan unit and two employees of Supermicro’s Taiwan unit, for allegedly smuggling high-end AI servers to China in violation of US export controls. The Keelung district prosecutors charged eight suspects with breach of trust and document forgery; a ninth suspect remains at large, accused of siphoning funds from a distributor company involved in the scheme Ars Technica.

The investigation centres on 130 Nvidia B300 servers that were allegedly destined for a facility in Taiwan. According to prosecutors, co-conspirators forged documents to make it appear the servers were installed and used locally, but 74 of those units were ultimately exported to Chinese customers. The remaining 56 servers were seized by Taiwanese customs after irregularities were detected. Of the servers that made it through, 50 were transshipped via Indonesia, eight via Japan, and the rest were exported directly to China Al Jazeera.

The indictments follow a broader crackdown on circumvention of US export controls, which since 2022 have required a license to export advanced semiconductors to China. In March, US authorities arrested Supermicro co-founder Wally Liaw on charges of funneling $2.5 billion in restricted AI servers to China since 2024. That case prompted Taiwan’s own investigation, which uncovered the current smuggling operation.

Notably, Nvidia CEO Jensen Huang had previously confronted Supermicro leadership over the issue. According to sources familiar with the matter, Huang urged SuperMicro to “fix” the compliance problem before the latest smuggling had come to light Ars Technica.

Nvidia issued a statement saying its employees have “every incentive to work diligently with customers to ensure compliance with all applicable laws” and that it would cooperate with Taiwanese authorities to “resolve the allegations as quickly as possible.” Supermicro stated that its cooperation with Taiwanese authorities led to the arrests, but did not comment on the specific indictments Al Jazeera.

The case underscores the growing difficulty for US chipmakers in maintaining compliance while navigating tensions between Washington’s national security priorities and the commercial pull of the Chinese market. For engineers and founders building on Nvidia’s AI infrastructure, the event serves as a reminder that supply chains linking Taiwan to China remain under intense scrutiny — and that even top employees are not immune to prosecution.