On Wednesday, March 25, shareholders of Super Micro Computer Inc. (SMCI) officially filed a lawsuit against the Silicon Valley server giant, accusing it of securities fraud and alleging that company executives violated US export control laws.
In the collective lawsuit filed with the federal court in San Francisco, shareholders accused Super Micro of concealing its reliance on the Chinese market. The company’s co-founders Yih-Shyan Liaw, sales manager Ruei-Tsang Chang, and contractor Ting-Wei Sun are alleged to have smuggled Nvidia AI chips to China, in violation of US export controls, facing criminal charges from prosecutors.
Shareholders also pointed out in the complaint that Super Micro was aware that a significant portion of its servers were sold to Chinese enterprises. They claimed that the company had significant deficiencies in complying with export control laws and inflated business prospects by concealing these facts to boost stock prices.
The other defendants in this civil lawsuit include Super Micro’s founder and CEO Charles Liang and CFO David Weigand. Super Micro has not immediately responded to requests for comments regarding this matter.
Super Micro had previously stated that they are cooperating with the government investigation and emphasized that the alleged criminal activities violated the company’s internal policies. Currently, neither Super Micro nor Nvidia faces criminal charges, and Nvidia has not been named as a defendant in this shareholder lawsuit.
When sudden negative news causes a sharp drop in a company’s stock price, shareholders often resort to legal action. This lawsuit aims to seek unspecified damages for shareholders who invested in Super Micro between April 30, 2024, and March 19, 2026.
The main catalyst for this lawsuit was the US prosecutors’ allegations on March 19 that senior Super Micro executives smuggled Nvidia chips worth billions of dollars to China, resulting in a 33% plunge in the company’s stock price on March 20. This significant decline led to the evaporation of around $6.1 billion from the company’s market value.
Following the smuggling case revelations, Yih-Shyan Liaw resigned from Super Micro’s board of directors. He and Ting-Wei Sun were arrested in the US on March 19 and are set to appear in court at the Northern District of California. Ruei-Tsang Chang is currently a fugitive.
Prosecutors responsible for the criminal case stated that Yih-Shyan Liaw and Ruei-Tsang Chang instructed an unnamed company in Southeast Asia to purchase servers fitted with Nvidia chips. Between 2024 and 2025, the company procured servers worth up to $2.5 billion.