Super Micro Computer shares plunged 33% Friday after federal prosecutors charged company co-founder Wally Liaw and two others in a scheme to illegally divert advanced Nvidia-powered servers to China, intensifying new scrutiny on the server maker’s compliance controls and corporate governance.
The sharp selloff marked one of the steepest single-day drops in the company’s history as investors weighed the fallout from the newly unsealed indictment. Super Micro itself was not named as a defendant, but the charges immediately raised fresh concerns about a company already burdened by a troubled corporate history.
According to federal prosecutors, Liaw was charged alongside another employee and a contractor in connection with an alleged effort to route billions of dollars’ worth of restricted artificial-intelligence server technology through intermediaries and into China in violation of U.S. export-control laws. The Justice Department said total orders tied to the scheme reached roughly $2.5 billion, with at least hundreds of millions of dollars in servers allegedly diverted.
Super Micro moved quickly to distance itself from the allegations. The company said the conduct described in the indictment violated its internal policies and compliance procedures. Liaw was first placed on administrative leave, and the company later announced his resignation from the board. Super Micro also said it ended its relationship with the contractor named in the case and took action against the employee involved.
The episode has renewed questions about Super Micro’s judgment in bringing Liaw back into the company after his earlier departure following an accounting-related controversy. Liaw resigned from the company in 2018 but returned as a full-time employee in 2022 before later joining the board.
Wall Street analysts said the indictment could deepen credibility problems for a company that had already faced investor skepticism. The allegations, while not directed at Super Micro as a corporate entity, threaten to cast a shadow over customer relationships, compliance assurances and the company’s standing in a sector where export restrictions have become increasingly important.
The case also underscores the growing pressure on U.S. technology companies as Washington tightens restrictions on advanced semiconductor and AI hardware exports to China. Nvidia, whose chips are widely used in high-performance AI servers, has become central to that broader geopolitical and commercial fight.
Super Micro has been one of the major beneficiaries of the AI server boom, helping fuel a dramatic rise in its stock over the past two years. Friday’s collapse showed how quickly that momentum can reverse when governance and regulatory risks move to the forefront.
The criminal case is expected to keep the company under heavy scrutiny in the weeks ahead as investors look for signs that the fallout will remain limited to the individuals charged rather than spread to the broader business.
