Shares of Super Micro Computer Inc (NASDAQ:SMCI) tumbled sharply in aftermarket trade after federal prosecutors announced criminal charges against three individuals accused of conspiring to export advanced U.S. artificial intelligence server technology to China in violation of U.S. export controls.
The stock fell as much as 14.6% in trading after the Department of Justice made the indictment public Thursday. The DOJ said the defendants include company co-founder Yih-Shyan Liaw, who was arrested the same day.
According to the Department of Justice, the charges allege a scheme to send high-performance AI computer servers to China that circumvented U.S. export restrictions. In a statement, John A. Eisenberg, Assistant Attorney General for National Security, said: "The indictment unsealed today details alleged efforts to evade U.S. export laws through false documents, staged dummy servers to mislead inspectors, and convoluted transshipment schemes, in order to obfuscate the true destination of restricted AI technology - China."
The DOJ said the alleged activity resulted in sales of at least $2.5 billion for Super Micro between 2024 and 2025.
Super Micro issued a statement noting that the indictment does not name the company as a defendant and that it is cooperating with authorities. The company also said the three individuals charged were two employees and a contractor. Super Micro has placed the two employees on administrative leave and terminated the contractor.
Super Micro manufactures advanced servers that incorporate NVIDIA Corporation (NASDAQ:NVDA) chips. Because those NVIDIA chips fall under U.S. export controls, servers built with them are subject to restrictions on shipment to certain destinations. Super Micro is not approved by the Commerce Department to export servers containing NVIDIA chips to China, the company said.
The charges and the arrest of a founder present multiple immediate challenges for the company and market participants. Investors reacted quickly in aftermarket trading, while regulators and enforcement authorities are now engaged. The company has indicated cooperation but is not named as a defendant in the indictment.
Context and immediate facts
- Three individuals were charged by the DOJ for conspiring to send high-performance AI servers to China in violation of U.S. export controls.
- One of those charged was co-founder Yih-Shyan Liaw, who was arrested on Thursday.
- The DOJ attributed at least $2.5 billion in Super Micro sales to the alleged scheme during 2024-2025.
- Super Micro says it is not named in the indictment, is cooperating with authorities, has placed two employees on administrative leave, and fired the contractor involved.
Market reaction and sector implications
Aftermarket trading showed a sharp sell-off in Super Micro shares, with a maximum intraday decline of 14.6% reported after the news. The allegations and subsequent enforcement actions have direct relevance for the server manufacturing and semiconductor supply chain sectors, particularly companies that assemble high-performance AI servers using U.S.-controlled components.
At this time, Super Micro says it is cooperating with investigators and is not a defendant in the indictment, while enforcement officials pursue alleged violations tied to export controls governing advanced computing components.