Supermicro Launches Internal Probe After Cofounder Indicted in Nvidia Chip Smuggling Scheme

Supermicro has launched an independent internal investigation following a federal indictment of cofounder Yih-Shyan Wally Liaw. The Department of Justice alleges that Liaw and two other individuals conspired to route $2.5 billion in servers containing Nvidia GPUs to China in violation of export controls during 2024 and 2025.

The company announced on April 7, 2026, that the investigation is being led by the board’s newest director, Scott Angel and audit committee chair Tally Liu. To facilitate the probe, the board hired the law firm Munger, Tolles & Olson, which in turn engaged the consulting firm AlixPartners for audit and forensic accounting expertise. These firms are working with Supermicro’s auditor, BDO USA, and will report their findings directly to Angel and Liu.

Details of the Federal Indictment

The Department of Justice charged Liaw, Ruei-Tsang Steven Chang, and Ting-Wei Willy Sun last month. The indictment claims the trio conspired to use an unnamed Southeast Asian company as a front to hide the identity of the true buyers located in China.

According to the indictment, the group employed elaborate subterfuge to deceive government auditors. This included storing thousands of fake replica servers in a warehouse and organizing a team in Southeast Asia to set up these servers, including providing the team with van transportation and meals. The indictment further alleges that the group used hair dryers to remove packaging labels, which were then reaffixed to the replica servers to maintain the illusion of compliance.

Liaw and Sun have pleaded not guilty, while Chang remains at large. Supermicro was not named in the indictment, and the company stated We see cooperating with the government.

Executive Background and Corporate Governance

Yih-Shyan Liaw co-founded Supermicro in 1993 alongside CEO and chairman Charles Liang and Sara Liu. During the period cited in the indictment, Liaw served as a senior executive and board member.

Liaw’s history with the company includes a retirement in February 2018 following a third board-led investigation. That investigation was linked to an SEC probe into accounting practices and a Nasdaq delisting, which resulted in Supermicro paying a $17.5 million settlement to regulators. After serving as president at the French server company 2CRSi from June 2020 to April 2021, Liaw returned to Supermicro as a consultant in May 2021. He resumed a full-time executive role in August 2022 and was reappointed to the board in December 2023. Liaw resigned from the board on March 20, 2026, one day after his arrest.

CEO Charles Liang has characterized the company as a victim of the alleged scheme.

Our internal review and the independent directors’ investigation are being conducted in line with our commitment to ensuring our technology is handled with the highest level of ethical and legal scrutiny

Charles Liang, CEO of Supermicro

Previous Compliance Investigations

This current probe follows a previous board-led independent investigation conducted in 2024. That effort was initiated after the resignation of the company’s previous auditor, Ernst & Young (EY), which stated it could no longer rely on Supermicro management.

In 2024, director Susie Giordano led a special committee, working with law firm Cooley and Secretariat Advisors. That investigation reviewed 11 export transactions and found no evidence that the company attempted to circumvent export controls or was aware that products were diverted to prohibited locations. The 2024 disclosures did not mention China, and the committee found no evidence of products being shipped to Russia in violation of sanctions laws.

Despite the findings, the 2024 committee recommended replacing CFO David Weigand with a professional possessing more extensive experience at large public companies. However, Weigand remains in the CFO position. Other recommendations included the appointment of a chief accounting officer, a chief compliance officer, and a general counsel.

Market and Relationship Risks

Investors have expressed concern that these recurring compliance issues and the associated reputational risk could damage Supermicro’s relationship with Nvidia. The $4 trillion chipmaker supplies the GPUs that Supermicro integrates into servers for its customers.

In addition to the board-led probe, Supermicro has initiated an internal review of its global trade compliance program, led by general counsel Yitai Hu. The company stated that all findings from this review will be reported directly to the independent board directors.

The current investigative leadership includes Scott Angel, who joined the board in March 2025 after a 37-year career at Deloitte, and Tally Liu, who joined the board in 2019 following his retirement as CEO of Wintec Industries.