Quick overview

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Shares of Super Micro Computer plunged 27% on Friday in Wall Street trading after the U.S. Department of Justice (DoJ) filed criminal charges against three individuals linked to the company—including its co-founder—over an alleged scheme to smuggle artificial intelligence technology to China worth at least $2.5 billion.

The premarket drop alone wiped out more than $4 billion from the company’s $18.49 billion market capitalization. Super Micro, a key manufacturer of AI servers powered by NVIDIA chips, clarified that it is not named as a defendant in the case and stated that it cooperated with investigators throughout the process.

Those charged include co-founder Yih-Shyan Liaw, sales manager Ruei-Tsang Chang, and contractor Ting-Wei Sun.

According to the indictment, the three allegedly coordinated a scheme to export U.S.-made servers through Taiwan to Southeast Asia, where the products were repackaged in unmarked boxes and then illegally shipped into China. Between April and mid-May 2025 alone, shipments reportedly exceeded $500 million.

The San Jose–based company has suspended the employees involved and terminated its relationship with the contractor. However, the scale of the scandal has already raised concerns among industry analysts.

Analysts at Bernstein warned that the charges pose “serious credibility issues that could impact the business” and flagged the risk of a potential distancing by NVIDIA. “If that happens, it could disrupt SMCI’s critical GPU supply and have severe consequences,” they noted.

A stock already under pressure

The case adds to existing headwinds.

In 2022, Washington imposed export controls on advanced semiconductors aimed at limiting China’s access to cutting-edge technology and slowing the development of its AI capabilities. Super Micro had previously acknowledged that these restrictions affected some of its products, including those incorporating NVIDIA’s A100 and H100 chips.

The stock had already been under pressure since 2024, when the company reached a peak valuation of $67 billion amid surging demand for AI hardware.

Since then, margin compression in server assembly and allegations raised by short-seller Hindenburg Research (now defunct) had weighed on the share price. The latest legal developments are now intensifying that downward trend.