Taiwan authorities conducted a comprehensive raid on Super Micro Computer Inc.'s local office on Monday as part of an expanded investigation into alleged smuggling of Nvidia AI chips into China using the company's servers. According to reports from CNBC TV18, Taiwan's Keelung District Prosecutors Office searched the residences of six individuals and premises of three affiliated companies, including Super Micro's local operations. The prosecutors also summoned individuals for interviews as part of the ongoing probe. Super Micro's Taiwan office was among the locations specifically targeted in the operation, with the company confirming it is working closely with Taiwanese authorities and committed to protecting its advanced technologies and intellectual property. As reported by Bloomberg, the raids mark an expansion of Taiwan's first public crackdown on AI chip diversion after years of pressure from Washington to take a more active role in curtailing China's access to technology.
The raid sent Super Micro's shares plummeting as much as 8% in US trading following the report, as reported by Bloomberg. Distributor Albatron Technology confirmed it was searched in a regulatory filing and reported no material financial or operational impact from the raid, though its shares plunged 10% in Taipei according to CNBC TV18. As reported by The Economic Times, data center operator Chief Telecom was also among the sites visited during the operation, with the company stating it was working with prosecutors on the case and operations remained normal, though its stock slid more than 2% on Tuesday. Super Micro has previously stated it is cooperating with Taiwanese authorities and was not charged as a company in earlier phases of the probe. In its latest statement, the company emphasized its commitment to protecting advanced technologies and intellectual property, stating it continues to cooperate with law enforcement and government officials across jurisdictions to ensure technology is distributed as lawfully intended.
The Monday operation extends May 2026 raids by the same office, which covered 12 locations and led to the seizure of approximately 50 high-end Super Micro servers containing restricted Nvidia chips. According to CNBC TV18, authorities made their first known detentions of alleged chip smugglers in May on charges of falsifying documents related to exports of Super Micro servers containing highly priced Nvidia AI chips. The three individuals were suspected of successfully sending at least one batch of Nvidia's AI chips to China via Japan, and attempting to export around 50 servers that Taiwan authorities seized before they left the island. The case reflects sustained U.S. pressure to restrict advanced AI semiconductors to China over national security concerns, with Taiwan serving as a critical hub for semiconductor manufacturing and server assembly.
The case highlights the current regulatory challenges in Taiwan, where authorities do not yet treat AI chip exports to China as a standalone crime. As reported by CNBC TV18, Taipei is actively considering legislation to criminalize such exports directly, which would provide stronger enforcement tools and give local prosecutors more tools to crack down on illicit trade of AI hardware. The majority of these chips are manufactured in bulk on Taiwan, making the island a critical juncture in global AI semiconductor supply chains, with both Nvidia and Advanced Micro Devices relying on Taiwan Semiconductor Manufacturing to make their cutting-edge chips. Any move to curb AI chip sales is likely to trigger a response from President Xi Jinping's government in China, which views Taiwan as its own territory, a characterization the self-ruled island democracy strongly rejects.
