Shares of Super Micro Computer Inc. SMCI fell sharply on Monday after Taiwanese authorities reportedly raided the company’s offices.
The raids were part of an expanding investigation into the alleged smuggling of Nvidia artificial intelligence chips into China through Super Micro servers.
The stock dropped more than 9% during afternoon trading before recovering some of its losses. At the time of writing, shares were down about 6%.
The latest development broadens an ongoing investigation by Taiwanese authorities into allegedly illegal exports of Super Micro servers containing Nvidia AI chips.
Taiwan expands probe into alleged AI chip smuggling
According to Taiwan’s Keelung District Prosecutors Office, investigators searched the residences of six individuals and the premises of three affiliated companies on Monday as part of the investigation.
While prosecutors did not identify those searched, Bloomberg reported, citing a person familiar with the matter that Super Micro’s Taiwan office was among the locations raided.
Super Micro later confirmed that it is cooperating with authorities.
“Super Micro is committed to protecting our advanced technologies and intellectual property,” the firm said. “Super Micro products continued to be targeted in these matters, and we continue to cooperate with law enforcement and government officials in Taiwan and other jurisdictions in which we operate to ensure our technology is distributed as lawfully intended.”
The investigation represents an expansion of Taiwan’s first public crackdown on the diversion of AI chips following years of pressure from the United States to strengthen efforts aimed at restricting China’s access to advanced semiconductor technology.
The US has long imposed export restrictions on advanced AI chips over concerns they could support China’s military capabilities.
Investigation widens beyond Super Micro
Authorities also searched Taiwanese data center operator Chief Telecom Inc. and Super Micro distributor Albatron Technology Co., according to a person familiar with the investigation, said the Bloomberg report.
Albatron confirmed in a stock exchange filing that local investigators searched the company earlier on Monday but did not disclose the reason for the action.
The company also stated there was no financial impact from the investigation.
Taiwan’s Keelung District Prosecutors Office said the individuals whose residences were searched have been summoned for questioning.
The latest enforcement action builds on arrests made in May, when authorities detained three individuals accused of falsifying export documents involving Super Micro servers equipped with Nvidia AI chips.
According to previous reports, the suspects were believed to have successfully shipped at least one batch of Nvidia AI chips to China through Japan and attempted to export around 50 servers that Taiwanese authorities seized before they left the island.
Taiwan considers tougher export controls
Taiwan currently does not classify exports of AI chips to China as a criminal offense.
While authorities warn exporters they may violate US regulations, prosecutors must rely on other local laws when pursuing alleged violations.
Taipei is now considering strengthening export controls on AI chip sales to China to better align with US restrictions.
Such changes would provide prosecutors with broader legal authority to pursue cases involving the illicit trade of AI hardware.
The proposed measures come as Taiwan remains central to the global semiconductor supply chain, with both Nvidia and Advanced Micro Devices relying on Taiwan Semiconductor Manufacturing Co. to produce their most advanced AI chips.
The expanding investigation and the prospect of tighter export regulations have added fresh uncertainty for Super Micro investors, contributing to Monday’s sharp decline in the company’s share price.
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