Supermicro has fired multiple employees following an internal investigation into a scheme to ship $2.5 billion worth of GPU-equipped servers to China in violation of U.S. export controls.
The U.S. Department of Justice indicted three individuals in March: Supermicro co-founder Yih-Shyan "Wally" Liaw, Taiwan-based executive Ruei-Tsang "Steven" Chang, and broker Ting-Wei "Willy" Sun. They were charged with conspiring to violate the Export Controls Reform Act, conspiring to smuggle goods and defrauding the U.S. government.
Supermicro's board-commissioned investigation, completed this week, found no evidence that current senior management knew of the diversion scheme. The probe also found no grounds to question the reliability of previously issued financial statements. But it did identify systemic failures: staff members across sales, technical support and business development functions failed to properly implement U.S. export controls or adhere to company policies.
All three indicted individuals no longer have any relationship with the company. Liaw and Chang were terminated; Sun had already been fired after the indictment. Supermicro took additional personnel actions against other employees in the affected functions.
The investigation exposed a compliance program that was insufficient to prevent the violations. Supermicro's board adopted all recommendations to strengthen export controls and has begun implementing them.
The incident compounds a pattern of governance failures at the company. Supermicro has twice narrowly avoided de-listing due to accounting scandals and faced a previous unauthorized export probe spanning Singapore and Taiwan.
Liaw, who had resigned in 2018 following an accounting scandal, was arrested in connection with the current smuggling allegations. His arrest triggered a 12 percent drop in Supermicro's stock in after-hours trading.
Taiwan authorities conducted a parallel investigation that led to the detention of four Supermicro employees for questioning last month related to sales to a technology company. Taiwan prosecutors also detained an Nvidia employee in July in connection with the alleged smuggling of AI servers powered by Nvidia's advanced chips.
Supermicro received a federal grand jury subpoena in June.
