Super Micro says two Taiwan employees detained in AI server probe

• Taiwanese prosecutors questioned six people and searched 12 locations, including offices of Super Micro Taiwan, distributor Albatron Technology, and data centre operator Chief Telecom, over alleged document forgery and breach of trust
• Super Micro states it is not a target of the investigation and has been cooperating with Taiwan authorities for several months, having previously facilitated seizure of 50 servers that were deceptively acquired through an authorized reseller
• The investigation follows March 2024 U.S. Justice Department charges against three people associated with Super Micro, including a co-founder, for allegedly smuggling at least $2.5 billion worth of U.S. AI technology to China in violation of export laws

Summary: Super Micro Faces Taiwan Export Control Investigation

Key Development: Super Micro Computer (SMCI) disclosed that four employees at its Taiwan unit were questioned by Taiwanese prosecutors investigating alleged illegal exports of advanced AI servers containing Nvidia chips to China. Two employees remain detained pending a court hearing, while two others were released on bail.

Investigation Details: This marks the second round of searches by Taiwan's Keelung District Prosecutors' Office in the probe. Six people were questioned on June 29 for alleged document forgery and breach of trust. Authorities conducted searches at 12 locations, including offices of Super Micro Taiwan, distributor Albatron Technology, and data center operator Chief Telecom.

Export Control Context: The servers contain Nvidia chips subject to U.S. export controls that prohibit shipment to China. In May, prosecutors detained three additional suspects and seized 50 servers allegedly diverted to the Chinese market through deceptive acquisition from authorized resellers.

Company Response: Chief Revenue Officer Matthew Thauberger emphasized that "Super Micro is not a target of this investigation" and confirmed the company has been cooperating with Taiwanese authorities for several months. All four questioned employees were placed on administrative leave.

Broader Legal Issues: Separately, the U.S. Justice Department charged three people associated with Super Micro in March, including a co-founder, with smuggling at least $2.5 billion worth of U.S. AI technology to China in violation of export laws.

Market Context: Taiwan, a semiconductor powerhouse and the world's largest producer of advanced AI chips, has tightened export controls to prevent technology transfers to China amid heightened geopolitical tensions.