Shares of Super Micro Computer Inc. (SMCI) tumbled more than 9% in Monday afternoon trading before paring losses to close roughly 6% lower, following reports that Taiwanese authorities raided the company's local offices as part of an expanding investigation into alleged smuggling of Nvidia artificial intelligence chips into China.
The raids, conducted by Taiwan's Keelung District Prosecutors Office, targeted the residences of six individuals and the premises of three affiliated companies, according to a statement from the prosecutors' office. While the authorities did not name the entities involved, Bloomberg reported, citing a person familiar with the matter, that Super Micro's Taiwan office was among the locations searched.
Super Micro confirmed it is cooperating with investigators. “Super Micro is committed to protecting our advanced technologies and intellectual property,” the company said in a statement. “Super Micro products continued to be targeted in these matters, and we continue to cooperate with law enforcement and government officials in Taiwan and other jurisdictions in which we operate to ensure our technology is distributed as lawfully intended.”
Investigation Widens Beyond Super Micro
The probe also extended to Taiwanese data center operator Chief Telecom Inc. and Super Micro distributor Albatron Technology Co., according to the Bloomberg report. Albatron confirmed in a stock exchange filing that local investigators searched its premises earlier Monday but did not disclose the reason. The company stated there was no financial impact from the investigation.
This enforcement action builds on arrests made in May, when Taiwanese authorities detained three individuals accused of falsifying export documents involving Super Micro servers equipped with Nvidia AI chips. According to earlier reports, the suspects allegedly succeeded in shipping at least one batch of Nvidia AI chips to China via Japan and attempted to export approximately 50 servers that were seized before leaving Taiwan.
Taiwan Considers Tighter Export Controls
Currently, Taiwan does not classify exports of AI chips to China as a criminal offense. While authorities warn exporters they may violate U.S. regulations, prosecutors must rely on other local laws when pursuing alleged violations. Taipei is now considering strengthening export controls on AI chip sales to China to better align with U.S. restrictions, which would provide broader legal authority to prosecute illicit trade of AI hardware.
The U.S. has long imposed export restrictions on advanced AI chips over concerns they could bolster China's military capabilities. Taiwan remains central to the global semiconductor supply chain, with both Nvidia and Advanced Micro Devices relying on Taiwan Semiconductor Manufacturing Co. to produce their most advanced AI chips.
The expanding investigation and the prospect of tighter export regulations have added fresh uncertainty for Super Micro investors, contributing to Monday's sharp decline. For broader context on the AI chip landscape, see our coverage of Nvidia's recent moves and Broadcom's challenge to Nvidia's networking dominance.
This article is for informational purposes only and does not constitute financial advice.
