The co-founder of one of Silicon Valley’s most prominent server manufacturers has been arrested on charges of orchestrating a multi-year scheme to smuggle billions of dollars worth of restricted artificial intelligence chips into China, in what prosecutors are calling the highest-profile export control case of its kind.
Yih-Shyan Liaw, known as Wally, co-founded Super Micro Computer and served on its board of directors. He was arrested Thursday in California and released on bail. Two others, Ting-Wei Sun, known as Willy, a contractor, and Ruei-Tsang Chang, known as Steven, a sales manager at Super Micro’s Taiwan office, were also charged. Sun is held pending a detention hearing while Chang remains at large.
All three face charges of conspiring to violate US export control laws by scheming to divert massive quantities of high-performance servers assembled in the United States to China between 2024 and 2025, according to the indictment filed in Manhattan federal court.
The pipeline they allegedly constructed worked by directing executives at an unnamed Southeast Asian company to place purchase orders with Super Micro as though the servers were destined for that company’s operations. The servers would then be assembled in the US, shipped to Super Micro’s Taiwan facilities, delivered to the Southeast Asian company at a different location, and handed off to a logistics firm that removed all identifying packaging before shipping to China.
To conceal the operation, prosecutors allege the co-conspirators staged thousands of dummy servers non-working replicas of the actual computers for compliance inspections, while the real servers had already been shipped to China. Surveillance video showed workers using hair dryers to remove labels from genuine servers and transfer them to the dummy machines.
During a three-week period from late April to mid-May 2025 alone, approximately half a billion dollars worth of US-assembled servers were shipped to China as part of the alleged conspiracy.
Super Micro Computer stated it is not a defendant in the indictment and has placed Liaw and Chang on administrative leave, and terminated its relationship with Sun, describing the alleged conduct as a contravention of its compliance policies. The company’s shares fell more than 20 percent in pre-market trading following the announcement.
Each defendant faces up to 30 years imprisonment if convicted on all counts.
US Attorney Jay Clayton said crimes involving sensitive technology must be met with swift action, warning that attempts to bypass export restrictions on advanced computing will face significant legal consequences.
