Super Micro reports that two employees in Taiwan have been detained as part of an investigation related to its AI servers.

      A Taiwanese court has ordered the detention of two employees from Super Micro as part of an expanding inquiry into the potential illegal routing of AI servers containing Nvidia chips to China. The Keelung District Court took the pair into custody on the night of June 30 to July 1, along with a vice president from Albatron Technology, a distributor for Super Micro. Additionally, two other employees from Chief Telecom, a separate company, were questioned and later released on bail, according to reports from Taipei Times and Bloomberg, which indicated that both implicated the involved parties.

      Prosecutors from the Keelung District Prosecutors’ Office claim that export documents were falsified to mask the actual destination of cutting-edge AI servers featuring Nvidia's GB300 chips, with this particular batch valued at around NT$700 million, approximately $22 million. This amount is distinct from, and significantly less than, the $2.5 billion smuggling scheme described by U.S. federal prosecutors in March when they charged Super Micro co-founder Yih-Shyan “Wally” Liaw and two associates.

      This marks the third separate enforcement action involving Super Micro’s operations in Taiwan within a few months, following a raid on its office in late June and earlier detentions in May. Super Micro stated in an open letter on July 1 that it has “zero tolerance for anyone who violates the law or our internal policies” and emphasized that “the relevant authorities have confirmed that Supermicro is not a target of this investigation.” The company mentioned that it has been collaborating with Taiwanese authorities for several months and has placed all four employees involved in the various investigations on administrative leave pending the case's resolution.

      The situation dates back to May 20, when Taiwan’s Coast Guard, in conjunction with Keelung prosecutors, intercepted 50 Nvidia GB300-equipped servers at a port, along with about NT$9 million in cash, resulting in the detention of three individuals at that time. This seizure escalated on June 29, when prosecutors conducted a raid on Super Micro’s office in Taiwan, as well as locations associated with Albatron and Chief Telecom, covering up to a dozen sites.

      Following the raid, Super Micro's shares dropped approximately 8% to 9%, contributing to a monthly decline of about 37% that coincided with the ongoing legal developments. The detentions also reignite memories of Super Micro’s tumultuous recent past. In August 2024, short seller Hindenburg Research accused the company of accounting manipulation, and two months later, Ernst & Young resigned as its auditor, citing issues regarding confidence in management’s representations. Super Micro narrowly avoided delisting from Nasdaq by submitting delayed financial statements before a November 2025 deadline, and an independent special committee ultimately found no evidence of fraud. PwC has since taken over as the auditor, though the current trafficking allegations focus more on individual employees and a distributor rather than the company's financial records.

      Super Micro's board has indicated an export-control review in advance of its upcoming earnings report scheduled for August 4. Earlier detentions in May in Taiwan, along with a related investigation into a transshipment route in Japan, suggest that prosecutors are exploring multiple avenues through which restricted hardware might have reached purchasers in China. Nvidia's CEO, Jensen Huang, has referred to smuggled data centers as a dead end, asserting that national security concerns outweigh any temporary sales lost due to export restrictions.

      No formal charges have yet been filed against the two detained employees, and Taiwanese legal procedures allow prosecutors several months to construct a case prior to deciding on any indictments. As a result, Super Micro finds itself in a familiar situation: distancing itself from allegations about its branded hardware while asserting that its core business remains unaffected. The validity of this distinction will depend on the findings of the investigators as they review the export documents central to the case, although it has not been publicly clarified whether this cooperation includes the release of internal export records.