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Super Micro Computer Inc shares slid sharply Friday, extending losses from the prior session after U.S. authorities charged co-founder Yih-Shyan Liaw in connection with an alleged scheme to move restricted artificial intelligence hardware to China.
The stock fell more than a quarter in early trading, compounding a steep after-hours decline reported a day earlier. The selloff reflects mounting investor concern over governance risks and potential supply disruptions tied to the case.
According to the U.S. Department of Justice, three individuals—including Liaw—are accused of conspiring to bypass export controls governing advanced computing systems. Prosecutors allege the group used misleading documentation, intermediary shipments, and altered server configurations to obscure the true destination of the equipment.
Authorities claim the transactions involved high-performance servers powered by chips from NVIDIA Corporation, whose products are subject to strict U.S. export restrictions when destined for China. The alleged activity is said to have generated billions of dollars in revenue over a two-year period.
Liaw was arrested on Thursday, while two employees tied to the case have been placed on administrative leave. A contractor implicated in the matter has been dismissed, the company said. Super Micro added that it is not named as a defendant and is cooperating with investigators.
Prosecutors further allege that shipments were routed through a Southeast Asian intermediary with prior knowledge that the technology would ultimately reach China, raising concerns about enforcement gaps in global supply chains.
Analysts warn that the fallout could extend beyond legal exposure. Questions are emerging about internal oversight, particularly given Liaw's continued involvement with the firm after earlier controversies. Some market watchers suggest that partners—including chip suppliers—may reassess their relationship with the company.
Despite the central role of its hardware in the NVIDIA is not accused of wrongdoing, and officials indicated there is no evidence the firm was aware of the alleged diversion.
