(July 1): Taiwanese prosecutors detained two Super Micro Computer Inc employees following a raid of the US company’s local offices earlier this week over alleged shipments of Nvidia Corp chips to China.
Prosecutors are investigating four Super Micro employees for falsifying documents and breach of trust, a person familiar with the matter said. The Keelung District Court agreed to the prosecutors’ request to detain two of them while the other two were released on bail but restricted from leaving Taiwan, the person added, declining to be named as details are private.
The person said a manager at Super Micro distributor Albatron Technology Co has also been detained. Albatron confirmed the detention of a manager in a filing on Wednesday. An employee of data centre operator Chief Telecom Inc was also questioned earlier this week, the person said.
The allegations came after local investigators raided the residences of all six people and the offices of Super Micro, Albatron and Chief Telecom on Monday as part of the ongoing China chip smuggling probe.
Super Micro did not immediately respond to a request for comment outside of regular office hours. On Monday, after the raids, it said, "We continue to cooperate with law enforcement and government officials in Taiwan and other jurisdictions.”
Super Micro shares tumbled 8% in the US on the news of the raids, though they recouped some of those losses Tuesday.
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Chief Telecom said Monday that it is cooperating with the investigation, adding that operations remain normal with no material impact on its finances or business.
A court official on Wednesday confirmed that three individuals have been detained but declined to provide additional details. The United Daily News and other media also reported on the company affiliations of the detained individuals.
Those taken into custody this week are in addition to three other detentions in May in connection with the ongoing investigation. They were the first known detentions of alleged chip smugglers, also on suspicion of falsification of documents related to exports of Super Micro servers containing Nvidia’s much-coveted AI chips.
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The three detained in May are suspected of successfully sending at least one batch of Nvidia chips to China and of attempting to export around 50 servers that were seized before they left the island.
Taiwan doesn’t currently treat AI chip exports to China as a crime but is mindful of the risk of providing high-end technology to a country that periodically threatens the self-ruled democracy with invasion. Taiwan’s main defence guarantor, the US, is also pushing to restrict Beijing’s access to AI technology.
While Taiwan authorities warn potential sellers to China that they may be breaking US rules should they proceed, the only legal recourse through the island’s courts now is to charge suspected smugglers with violations of other, existing local laws. Taipei is now considering criminalising exports themselves, which would give local prosecutors more tools to go after the illicit trade.
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