GoKawiilSuper Micro Computer co-founder Yih-Shyan "Wally" Liaw pleaded not guilty on Wednesday in a Manhattan federal court to charges that he helped illegally divert billions of dollars' worth of Nvidia-powered servers to China, Bloomberg reported. Co-defendant Ting-Wei "Willy" Sun, an outside contractor described by prosecutors as a "fixer" in the smuggling scheme, also entered a not-guilty plea at the hearing before U.S. District Judge Edgardo Ramos.
Liaw has been released on a $5 million bond, while Sun's lawyer told the judge that he's negotiating a bail package with prosecutors. The third defendant, Ruei-Tsang "Steven" Chang, a former general manager in Super Micro's Taiwan office, is not in U.S. custody. Judge Ramos set a November 2 trial date for the case.
Federal prosecutors allege that Liaw, Chang, and Sun conspired to sell U.S.-assembled servers containing Nvidia's export-controlled AI chips to Chinese customers through an unidentified Southeast Asian pass-through company. The case is the highest-profile prosecution yet in the U.S. government's crackdown on the alleged smuggling of restricted AI chips to China.
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The scheme reportedly involved swapping serial number stickers from real servers onto non-functioning dummy units using heat guns, then shipping the genuine hardware onward to China with fabricated paperwork. CCTV footage captured workers using heat guns to swap the serial numbers at a Southeast Asian warehouse. Prosecutors estimate the operation generated roughly $2.5 billion in sales since 2024, with shipments between April and May 2025 alone being valued at over $500 million.
The charges, unsealed on March 19, immediately hammered Super Micro's stock price, erasing more than $6 billion from the company's market cap, with the stock falling roughly 33% in a single session. Liaw has since resigned from Super Micro's board of directors.
Super Micro itself isn’t named as a defendant in the indictment, but acknowledged that the three accused individuals are "associated" with the company in an official statement. The server maker called the alleged conduct a violation of its internal policies and said it maintains a compliance program covering U.S. export and re-export control laws. Nvidia also distanced itself from the scheme, telling Tom's Hardware that strict compliance is a priority and that it does not provide service or support for unlawfully diverted systems.
U.S. Senators Jim Banks and Elizabeth Warren wrote to Commerce Secretary Howard Lutnick, urging a pause on all active export licenses for advanced Nvidia AI chips headed to China and Southeast Asian intermediaries. Shareholders have also filed a securities fraud lawsuit against Super Micro, alleging the company concealed its dependence on revenue from illicit sales.
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