Taiwan prosecutors suspect three individuals successfully smuggled at least one shipment of Nvidia Corp. (NASDAQ: NVDA) AI chips to China, routing the hardware through Japan before it reached its final destination.
The trio was detained last week by Taiwan’s Keelung District Prosecutors Office for allegedly falsifying documents related to exports of Super Micro Computer Inc. (NASDAQ: SMCI) servers containing advanced Nvidia chips.
The US has barred the sale of these chips to China without a license from Washington, making the alleged diversion a serious violation of American export control law.
When authorities apprehended the three defendants, they also seized approximately 50 servers for which the trio allegedly prepared fraudulent export documents.
However, at least one shipment had already cleared Taiwan customs before authorities moved to make arrests, according to people familiar with the matter who requested anonymity due to the ongoing criminal investigation.
That earlier shipment traveled to Japan before eventually making its way to Hong Kong, a known waypoint for hardware that is ultimately shipped to mainland China.
The defendants also allegedly planned to use Japan as an intermediary location for the batch of servers that Taiwan officials seized last week, according to the same people familiar with the matter.
The probe may represent the first known instance of prosecutors targeting an AI-chip smuggling route through Japan, a close US ally and cornerstone of American defense strategy in the Asia-Pacific region.
An official with the Japanese Ministry of Finance’s Customs Bureau declined to comment, stating: “There is a framework for information sharing with Taiwan, but we will refrain from commenting on individual cases.”
Taiwan authorities have not accused Nvidia or Super Micro of any wrongdoing in connection with the alleged smuggling operation.
Nvidia Chief Executive Officer Jensen Huang, asked about the Taiwan case on Saturday, said the chipmaker is “rigorous” in explaining regulations to all of its partners.
“Ultimately Super Micro has to run their own company,” Huang told reporters upon his arrival in Taipei, where he is scheduled to attend events through the following week.
“I hope that they will enhance and improve their regulation compliance and avoid that from happening in the future,” Huang added, placing responsibility squarely on the server maker.
Super Micro said in a statement that it worked closely with Taiwanese authorities on the case, resulting in the arrest of suspects and seizure of servers “that had been deceptively acquired after being sold by Super Micro to an authorized reseller.”
The company added that the initial sale to the authorized reseller “followed a rigorous vetting and review process that exceeded applicable government requirements,” pushing back against any suggestion of internal compliance failures.
Super Micro also stated that its “robust compliance frameworks” are “supported by rigorous due diligence in alignment with Nvidia and other partners.”
“In addition, recent events underscore the need for industrywide solutions that would further help safeguard supply chains and strengthen enforcement of export control laws,” the company said in an emailed statement.
The case marks 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 advanced technology.
American prosecutors are now pursuing at least five criminal cases related to semiconductor diversion, signaling a significant escalation in enforcement activity following years of relative quiet on the export control front.
