Source: Fortune
Summary
Supermicro’s co-founder Yih-Shyan “Wally” Liaw has been charged with conspiring to smuggle $2.5 billion worth of Nvidia GPUs to China. The alleged scheme involved routing servers through a Southeast Asian company to Chinese buyers. This is not the company’s first brush with export-control violations, as it pleaded guilty in 2006 to illegally exporting computer equipment to Iran and paid a $150,000 fine. The company has not been accused of wrongdoing in the latest allegations, but its stock plummeted 33% after the news. Supermicro has said it is cooperating with law enforcement and has placed Liaw on administrative leave.
Our Reading
The numbers tell one story. Supermicro’s history of export-control violations is a familiar tale. The alleged China conspiracy shares striking similarities with the 2006 Iran violation. The company’s co-founder, Yih-Shyan “Wally” Liaw, was at the center of both schemes. The latest allegations come as the company was dealing with accounting issues and was at risk of being delisted by Nasdaq. The indictment claims that Liaw and his co-conspirators worked hard to keep the scheme secret, even using “dummy” servers to deceive auditors.
Supermicro’s ability to stay one step ahead of regulators is a testament to its expertise in navigating complex export-control regulations.
Author: Evan Null
