Three individuals linked to a U.S. technology supplier have been charged over an alleged scheme to smuggle artificial intelligence chips to China, according to the US Department of Justice.
Prosecutors said the group conspired to sell billions of dollars worth of restricted technology by falsifying records and using dummy equipment to bypass compliance checks.
The equipment included semiconductors designed by Nvidia, whose advanced AI chips are subject to strict U.S. export controls.
Individuals Identified And Company Response
The DOJ said it arrested U.S. citizen Yih-Shyan “Wally” Liaw and Taiwanese citizen Ting-Wei “Willy” Sun, while Ruei-Tsang “Steven” Chang, also a Taiwanese citizen, remains at large.
Liaw is a co-founder of Super Micro Computer, a publicly listed company that builds servers and supplies computing equipment.
In a statement, Super Micro said it is cooperating with authorities and confirmed the individuals were associated with the company, though it is not named as a defendant.
The company said Liaw and Chang have been placed on leave, while Sun, who worked as a contractor, has been terminated.
Alleged Scheme Used Dummy Servers And Fake Records
According to court documents, the group worked with an unnamed Southeast Asia-based firm to divert U.S.-made servers containing Nvidia chips to China.
The firm, referred to as Company-1, allegedly ordered servers while claiming to be the end user.
Authorities said the group then fabricated documentation to support that claim, while the actual equipment was repackaged and shipped to China through a logistics network.
To evade audits, the defendants allegedly used thousands of replica “dummy” servers designed to resemble the original hardware.
Prosecutors said Sun used tools such as hair dryers to remove and reattach labels and serial numbers, actions that were captured on surveillance footage.
Billions In Equipment Allegedly Diverted
The DOJ said Company-1 purchased around $2.5 billion worth of equipment and shipped large quantities of servers containing restricted AI technology to China.
Authorities noted that neither the defendants nor the U.S. manufacturer had obtained the required export licenses.
Nvidia said it works closely with customers and regulators on compliance, adding that it does not support systems that are unlawfully diverted.
Separate Case Highlights Ongoing Enforcement
In a related case, two Chinese nationals were previously charged with illegally shipping millions of dollars worth of Nvidia chips to China.
Prosecutors said those shipments were routed through Malaysia and Singapore before being redirected to buyers in Hong Kong and mainland China.
The cases reflect increasing scrutiny by U.S. authorities over the export of advanced semiconductors, which are viewed as critical to national security and technological competition.
Featured image credits: Roboflow Universe
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