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On March 19, 2026, an indictment was unsealed charging three individuals associated with the U.S.-based company Super Micro Computer, Inc. with conspiring to divert billions of dollars’ worth of computer servers containing advanced artificial intelligence chips to China, in violation of U.S. export control laws.
U.S. export control laws require a license for exports of advanced computing items and semiconductors to China and prohibit actions that are designed to evade or avoid licensing requirements. Technology companies have an obligation to ensure that their conduct — and the conduct of their employees, directors, and officers — fully complies with U.S. export control laws. The indictment highlights two essential issues for exporters: (1) the commercial impact export violations by employees can have on a company even when the company was not aware of wrongdoing; and (2) the tension between changing policy — given that the U.S. export control policy on exports of similar items has recently been softened — and enforcement risk for past activities that violated a stricter previous version of the policy. With these two issues in mind, it is crucial for companies to remember that (a) robust compliance policies that include employee training and compliance oversight are critical to mitigate risks, and (b) yesterday’s actions, regardless of how such actions would be treated today, can have severe consequences.
The indictment centers on three individuals, Yih-Shyan Liaw, Ruei-Tsang Chang, and Ting-Wei Sun, each of whom had connections to Super Micro Computer, Inc. (“SMCI”). SMCI, which was not itself indicted, is a California-based manufacturer of high-performance computer servers used in artificial intelligence (“AI”) and cloud computing applications. According to the indictment, Liaw co-founded SMCI and served as a board member and a senior vice president; Chang was a general manager in SMCI’s Taiwan office; and Sun acted as a third-party broker and “fixer” who facilitated the alleged diversions. The three defendants are alleged to have orchestrated a scheme to illegally route SMCI servers containing advanced Nvidia AI chips to China. Per the indictment, the servers were allegedly assembled in the United States, shipped to SMCI’s facilities in Taiwan, and then forwarded to a pass-through company located in Southeast Asia. The pass-through company then sent the servers to their true final destinations in China.
The scope of the alleged conspiracy was significant. Between 2024 and 2025, the pass-through company purchased approximately $2.5 billion worth of servers from SMCI, and between late April and mid-May 2025 alone, at least $510 million worth of servers were allegedly diverted to China. To conceal the scheme, the defendants allegedly staged thousands of “dummy” servers, or non-working physical replicas, at storage locations to deceive SMCI’s compliance team and U.S. Department of Commerce (“Commerce”) inspectors, while the actual servers had already been shipped to China.
Although SMCI was not named as a defendant in the indictment, the company has nonetheless experienced some fallout as a result of the charges. In the immediate aftermath of the unsealing of the indictment, SMCI’s shares fell approximately 33 percent, putting the company on track to lose billions from its market capitalization. Several law firms announced investigations into potential securities fraud claims on behalf of investors. Analysts at Bernstein, discussing SMCI and the indictment against Liaw, Chang, and Sun, wrote “this raises serious credibility issues” for SMCI “that could impact business,” while Citi cut its price target on SMCI from $39 to $25, citing reputational risk concerns.
In response to the indictment, SMCI placed Liaw and Chang on administrative leave and terminated its relationship with Sun. In a public statement, SMCI said the alleged conduct “is a contravention of the Company’s policies and compliance controls, including efforts to circumvent applicable export control laws and regulations,” and affirmed its cooperation with the government’s investigation. Liaw subsequently resigned from SMCI’s board of directors.
Although SMCI was not named as a defendant, the company has nonetheless faced the repercussions described above. This dynamic underscores the broader corporate risks that flow from the conduct of employees, directors, and officers, even when the company itself is not charged or implicated in the violative conduct. Market losses, reputational harm, downstream investigations, and shareholder litigation can all follow an indictment of key individuals. To mitigate those risks, companies operating in sensitive sectors should view this case as a reminder of the critical importance of robust compliance programs, effective internal controls, thorough due diligence in hiring and governance decisions, employee training and whistleblower protections, and proactive monitoring of export control obligations.
This case also offers an illustration of how U.S. enforcement priorities and evolving foreign policy do not always move in lock-step. The alleged conduct occurred after the imposition of stricter U.S. restrictions on the export to China of advanced AI chips, restrictions first imposed by the Biden administration in October 2022 and subsequently tightened under both the Biden and Trump administrations. Since then, the Trump administration has signaled a greater openness to such exports. After initially blocking the sales, the Trump administration reversed course in July 2025 and granted export licenses to allow Nvidia and AMD to resume shipments of certain AI chips to China. As of January 2026, Commerce also eased its license review policy for certain advanced AI semiconductor chip exports to China from a “presumption of denial” to a “case-by-case review.”
It may be tempting for companies and individuals to assume that such policy shifts could lower their enforcement exposure for previous violations. However, this case cautions against that assumption. The U.S. Department of Justice’s (“DOJ”) decision to prosecute this case, well after the policy landscape had begun to soften, suggests that violative conduct will be prosecuted regardless of where policy currently stands. Compliance with the law as it exists today remains paramount, even if the regulatory landscape appears to be moving in a more permissive direction.
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.
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