The U.S. Justice Department unsealed a criminal indictment on Thursday, March 19, 2026, charging Super Micro Computer (SMCI) co-founder and senior vice president Yih-Shyan “Wally” Liaw with illegally diverting approximately $2.5 billion worth of restricted Nvidia-powered AI servers to China, violating U.S. export controls. Liaw, along with sales manager Ruei-Tsang “Steven” Chang and contractor Ting-Wei “Willy” Sun, allegedly sold the servers through an Asia-based company between 2024 and 2025, knowing the equipment was destined for China.
Super Micro responded by placing the two employees on administrative leave and terminating the contractor, stating the alleged conduct contravened company policy. The company was not named as a defendant and emphasized its cooperation with the investigation. This event triggered a massive sell-off, with SMCI stock cratering over 25% in premarket trading and more than 27% at market open on Friday, March 20.
The fallout provided an immediate boost to rival Dell Technologies (DELL), whose stock rose roughly 3% in premarket trading as the market's principal SMCI competitor. Analysts warned the reputational damage raises long-term risks of customer losses for Super Micro, with Bloomberg Intelligence's Woo Jin Ho noting the indictment highlights limited progress in improving the company's financial controls.
This scandal follows a troubled period for Super Micro, including a 2024 short-seller report on accounting practices, a delayed 10-K filing, and the high-profile resignation of its auditor, Ernst & Young, in late 2025. The core fear for investors is that the controversy could threaten Super Micro's vital partnership with Nvidia, potentially leading to a cutoff of chip supplies. With Nvidia itself trading at compressed valuations, analysts argue there is little reason to "bottom fish" in SMCI, viewing the dip as a warning sign of systemic corporate governance issues rather than a buying opportunity.
