Supermicro Shares Fall 12% as DOJ Probes Smuggling Links

Supermicro stock dropped 12% at the open on November 12, hours after Bloomberg reported that the U.S. Attorney's Office in Manhattan is probing whether entities linked to Alice Huang helped smuggle Supermicro hardware containing Nvidia GPUs into China. The sell-off marks the latest turn in a scandal that has already claimed Nvidia CEO Jensen Huang, who resigned Wednesday after reports of an affair with Huang (no relation) surfaced.

What is the Justice Department investigating?

The Department of Justice is running multiple probes into Nvidia, according to Bloomberg, citing an anonymous source. One targets antitrust issues. Two others focus on Megaspeed — the Singapore firm where Alice Huang was a former top executive — and on San Jose-based Super Micro Computer. Separately, Manhattan federal prosecutors are examining alleged smuggling of Supermicro servers loaded with Nvidia's H200 and B200 GPUs into China. It remains unclear whether that probe connects to smuggling cases already brought in the U.S. or Asia. Neither Jensen Huang, Nvidia, nor Supermicro has been formally charged with any wrongdoing.

Supermicro did not immediately respond to a request for comment.

How deep does the smuggling case go?

Much of the public focus has centered on Megaspeed, reportedly one of Nvidia's largest buyers in Southeast Asia. But Supermicro, run by CEO Charles Liang — Jensen Huang's friend of three decades — has its own documented record.

In March, federal prosecutors charged Supermicro co-founder Yih-Shyan "Wally" Liaw and two others with routing roughly $2.5 billion in GPU-laden servers to China through a Southeast Asian front company. Bloomberg later identified the front company as OBON, a Bangkok-based AI infrastructure firm that has not been charged. Supermicro was not charged and says it was a victim of the scheme.

Liaw resigned his executive and board roles immediately after his arrest and has pleaded not guilty. His trial was pushed to March 2027 after his lawyers told the judge that subpoenas issued to Supermicro could be material to his defense. Attorney Nelson Boxer declined to comment.

Co-defendant Ting-Wei "Willy" Sun pleaded guilty in October, including to deleting an encrypted messaging app from his phone on the day of the arrests. His attorneys did not respond to a request for comment, and any cooperation agreement with the government remains unknown.

The indictment itself reads like a compliance officer's nightmare: thousands of nonworking dummy servers staged in warehouses to fool auditors, contractors using hair dryers to peel serial-number labels, and a compliance auditor off-site during an inspection allegedly enjoying "entertainment" paid for by another company. In December 2024, Liaw allegedly told the front company that "the only way" to secure Nvidia B200 chip allocations was to create monthly forecasts. Nvidia is not accused of wrongdoing.

Why is Singapore frustrated with Supermicro?

No public evidence directly connects the Supermicro and Megaspeed cases, but the threads keep multiplying. On Thursday, Singapore's Ministry of Home Affairs said the Singapore Police Force and Customs had opened investigations into Megaspeed and Alice Huang, and sought information from Supermicro. Supermicro offered only "limited cooperation," authorities said.

In a July 2025 meeting, Singapore officials raised the issue with U.S. authorities and asked for help obtaining Supermicro's cooperation, repeating the request to the DOJ and FBI on several occasions. "Despite these repeated requests, Singapore has to date received limited information or assistance in respect of the company," the statement reads.

What is Supermicro's compliance history?

The pattern predates Liaw's arrest by nearly two decades. In 2006, Supermicro pleaded guilty to illegally exporting computer equipment to Iran through a Dubai distributor — mirroring the basic scheme alleged against Liaw.

Liaw left Supermicro in 2018 amid a board-led investigation tied to its Nasdaq delisting and an SEC accounting probe that ended in a $17.5 million settlement in 2020. He returned as a consultant in May 2021 and rejoined the board in December 2023.

In 2024, Hindenburg Research accused the company of accounting manipulation and export-control failures; Supermicro denied the claims. Ernst & Young resigned mid-audit, saying it could no longer rely on management's representations. A special committee recommended replacing CFO David Weigand in December 2024; the successor, former Western Digital finance chief Mark Long, took over only last month.

Supermicro's board opened its own post-arrest investigation, overseen by director Scott Angel and former audit chair Tally Liu. In August, the company said the probe found no evidence current senior management knew of the alleged scheme, but produced an unspecified number of terminations across sales, business development, and technical support. The company has also disclosed a grand jury subpoena plus inquiries from the SEC, Commerce's Bureau of Industry and Security, and foreign authorities.

What comes next?

Despite everything, the Nvidia partnership held. Long and Liang tag-teamed the latest earnings call, reporting record fiscal first-quarter revenue of $19.9 billion, beating consensus, and raising full-year guidance to $72 billion to $82 billion.

Now that champion is gone. Nvidia will be led in the interim by Colette Kress, with former acting SDNY U.S. Attorney Joon Kim and Wachtell, Lipton, Rosen & Katz running an outside investigation into the foreign intelligence operation. Nvidia reports third-quarter results on November 17, with Kress in place of Huang; House lawmakers have requested a closed-door session with Huang the following day. In January, Sen. Elizabeth Warren — who sought answers from Nvidia about Supermicro and chip smuggling in June and re-upped the request this week — is likely to lead the Senate Banking Committee, with subpoena powers. For CFO Long, the test is just beginning.