Federal prosecutors in Manhattan unsealed an indictment Thursday charging Yih-Shyan "Wally" Liaw, 71 — co-founder of AI server maker Super Micro Computer — with conspiring to divert billions of dollars in Nvidia-powered servers to China in violation of U.S. export control laws.

The Scheme

Liaw, alongside Supermicro's Taiwan general manager Ruei-Tsang "Steven" Chang and a third-party fixer named Ting-Wei "Willy" Sun, allegedly ran the operation from 2024 through 2025. A Southeast Asian front company placed purchase orders with Supermicro as a legitimate end-buyer. After assembly in the U.S. and shipping to Taiwan, the servers were re-routed to China — repackaged in unmarked boxes with serial-number labels removed using hair dryers.

To fool auditors, the defendants staged thousands of fake replica servers at the Southeast Asian warehouse. Surveillance footage allegedly captured Sun and a co-conspirator applying and removing serial stickers as part of the ruse. A separate visit by a U.S. export control officer was also deceived using the dummy hardware.

Total sales through the scheme reached roughly $2.5 billion over two years. A single three-week window in spring 2025 accounted for around $510 million in diverted servers.

Fallout

Liaw and Sun were arrested Thursday; Chang remains a fugitive. Supermicro placed the employees on administrative leave and said the conduct "contravened" its compliance policies. Super Micro's stock fell 33% in the session following the indictment's release — one of the largest single-day drops in the company's history.

The case is the highest-profile U.S. criminal action yet targeting alleged smuggling of restricted AI infrastructure to China, where Nvidia's advanced GPUs are subject to strict export controls.