Super Micros actions plummet as the US indicts its co

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Adds details on Dell in paragraph 4, and investor comment in paragraph 9)
by Harshita Mary Varghese

Super Micro’s shares plunged by 28% on Friday after U.S. prosecutors charged three individuals connected to the company, including its co-founder, for smuggling billions of dollars worth of artificial intelligence technology to China.

U.S. prosecutors did not name Super Micro – a major AI server manufacturer using Nvidia chips – in the complaint. The company confirmed that it was not named as a defendant in the case and had cooperated with investigators.

The stock drop could wipe out over $5 billion of Super Micro’s market value, currently standing at $18.49 billion, if it persists. Analysts at Melius Research stated that Super Micro’s revenues could face “significant” risk as customers reassess their exposure to suppliers, pointing out Dell as the main beneficiary due to its size and closer ties with Nvidia. Dell’s shares rose by 6%.

The U.S. Department of Justice accused Super Micro’s co-founder Yih-Shyan Liaw, sales director Ruei-Tsang Chang, and entrepreneur Ting-Wei Sun of setting up a system to route U.S.-made servers to Southeast Asia via Taiwan, where the products were repackaged in unmarked boxes and smuggled into China.

They allegedly smuggled at least $2.5 billion in American AI technologies, including over half a billion dollars shipped between April and mid-May 2025, according to the ministry.

Super Micro placed employees on leave and terminated its relationship with the entrepreneur.

The U.S. imposed export controls on chips in 2022 to prevent Beijing’s military from benefiting from their technology and to slow down China’s AI development efforts.

“Investors would consider the possibility of risks that could lead to at least additional investigations, audits, costs, negative reputation, customers avoiding potential review, and Nvidia favoring other server manufacturers,” said Hendi Susanto, portfolio manager at Gabelli Funds, which holds a stake in Super Micro.

The surge in demand for AI chips drove Super Micro’s value to $67 billion in 2024, but margin pressure from server construction and allegations from the now-defunct short seller Hindenburg have since weighed down the stock price.