Key Takeaways
- Federal prosecutors charged Super Micro co-founder Wally Liaw and two associates with illegally diverting approximately $2.5 billion in Nvidia-based servers to China, breaching export restrictions.
- Super Micro suspended two staff members and terminated a contractor following discovery of their purported participation in the scheme.
- Super Micro (SMCI) shares plummeted over 25% during Friday’s premarket session.
- Dell (DELL) shares increased approximately 3% in premarket activity as Super Micro’s main competitor.
- Analysts at Bloomberg Intelligence cautioned that Super Micro faces elevated risk of losing customers due to severe reputational harm.
Shares of Dell Technologies (DELL) surged approximately 3% during Friday’s premarket session after competitor Super Micro Computer (SMCI) experienced a dramatic plunge exceeding 25%, triggered by federal criminal charges filed against a company co-founder related to alleged violations of export restrictions involving Nvidia processors.
On Thursday, the US Justice Department revealed an indictment targeting Yih-Shyan “Wally” Liaw — who serves as Super Micro’s senior vice president of business development, company co-founder, and board director — for allegedly orchestrating the illegal transfer of billions of dollars in AI servers to Chinese entities.
According to prosecutors, Liaw collaborated with two additional defendants to distribute export-restricted Nvidia-equipped servers via an Asian intermediary company, with full knowledge that the hardware would ultimately reach China in defiance of American export regulations.
The two other defendants named in the indictment are Ruei-Tsang “Steven” Chang, employed as a sales manager at Super Micro’s Taiwan facility, and Ting-Wei “Willy” Sun, an independent contractor whom federal authorities characterize as a “fixer” who purportedly coordinated the illicit operation.
Throughout 2024 and into 2025, the Asian intermediary entity acquired roughly $2.5 billion worth of servers, which were subsequently repackaged before being transported to China, according to Justice Department filings.
Super Micro acknowledged that it has suspended its two implicated employees pending investigation and severed ties with the contractor upon becoming aware of the accusations.
Notably, Super Micro itself was not designated as a defendant in the criminal indictment.
Super Micro’s Official Statement
In a Thursday evening statement, Super Micro declared that “the conduct by these individuals alleged in the indictment is a contravention of the Company’s policies and compliance controls.”
The organization emphasized that it operates a “robust compliance program” and remains dedicated to complete adherence to US export and re-export regulations. Super Micro further confirmed its ongoing cooperation with federal investigators.
This marks another chapter in Super Micro’s recent history of controversies. Last August, the company’s shares experienced a significant decline after a prominent short seller questioned its accounting methodologies, coinciding with Super Micro’s failure to submit its annual 10-K filing on schedule.
Following an investigation conducted by an independent committee appointed by the board, no evidence of fraudulent activity or misconduct was discovered. The delayed financial report was ultimately filed in February 2025, allowing the company to narrowly escape potential removal from the Nasdaq exchange.
Dell Emerges as Beneficiary
As Super Micro’s primary rival in the artificial intelligence server marketplace, Dell immediately capitalized on Friday’s developments through positive trading momentum.
Woo Jin Ho, an analyst with Bloomberg Intelligence, observed that “given the reputation damage, risks for share losses to Dell are heightened long term” — suggesting Super Micro may experience significant customer attrition.
Ho additionally remarked that the federal charges underscore what he perceives as insufficient advancement by Super Micro in strengthening its financial oversight mechanisms.
Super Micro’s stock declined more than 25% in premarket activity and extended losses beyond 27% as regular trading commenced Friday. Meanwhile, Dell registered gains of approximately 2–3% during the corresponding period.
