Three charged in alleged plot to export AI chips to China

A co-founder of Super Micro Computer and two others have been charged with attempting to smuggle advanced AI chips to China in violation of U.S. export restrictions, according to the Department of Justice (DOJ).

Yih-Shyan “Wally” Liaw, who served as a board member and senior vice president of business development at Super Micro, was arrested Thursday for allegedly conspiring to systematically divert the company’s servers to China.

Officials also arrested Ting-Wei “Willy” Sun, a Taiwan citizen whom the DOJ describes as a third-party broker and fixer. Ruei-Tsang “Steven” Chang, general manager of Super Micro’s Taiwan office, was also charged but “remains a fugitive,” according to a press release.

“As alleged in the Indictment, the defendants participated in a systematic scheme to divert massive quantities of servers housing U.S. artificial intelligence technology to customers in China,” Jay Clayton, U.S. attorney for the Southern District of New York, said in a statement.

“They did so through a tangled web of lies, obfuscation, and concealment — all to drive sales and generate revenues in violation of U.S. law,” he continued. “Diversion schemes like those disrupted today generate billions of dollars in ill-gotten gains and pose a direct threat to U.S. national security.”

Super Micro said Thursday that it has placed Liaw and Chang on administrative leave and terminated its relationship with Sun, which it described as a contractor. The company underscored that it has not been named as a defendant and is “cooperating fully with the government’s investigation and will continue to do so.”

“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,” it said in a statement.

“Supermicro maintains a robust compliance program and is committed to full adherence to all applicable U.S. export and re-export control laws and regulations,” the company added.

The DOJ accuses Liaw and Chang of directing executives at a company based in Southeast Asia to place orders with Super Micro for servers with certain chips, which were then repackaged into unmarked boxes and shipped to China.

They allegedly prepared false documents, records and communications to secure internal company approval.

To evade the firm’s compliance team on one occasion, they staged thousands of fake servers at locations where the company was supposedly storing the technology, while the real servers had already been sent to China, according to the DOJ. The same dummy servers were also allegedly later staged for a Commerce Department inspection.

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