Taiwanese prosecutors are investigating a case involving the illegal smuggling of high-end AI servers equipped with Nvidia chips to China, Hong Kong, and Macau, the Taipei Times reported.
As part of the investigation, a special task force searched the Taiwan Asia-Pacific headquarters of Supermicro, as well as Aaeon Technology and Chief Telecom, and questioned six individuals. Following prosecutorial interrogation, the general manager of Aaeon Technology and two Supermicro sales personnel were ordered into pretrial detention.
Nvidia AI chips at center of Taiwan smuggling probe
According to Taiwan’s Liberty Times, the Keelung District Prosecutors Office is investigating a case involving the smuggling of high-end AI servers to China, Hong Kong, and Macau.
On May 20, prosecutors executed search warrants at 12 locations, including the homes and offices of three suspects surnamed Yu, Wang, and Chen. At a warehouse in Keelung and other locations, investigators seized 50 AI servers purchased from Supermicro, valued at approximately NT$700 million (about US$24 million), each equipped with Nvidia GB300 high-end AI chips, along with more than NT$9 million (approximately US$310,000) in cash.
Authorities suspect the three men exported the servers containing Nvidia AI chips from Keelung to Japan, then rerouted them through Hong Kong before shipping them onward to mainland China. Investigators believe they successfully smuggled at least one shipment of Nvidia AI chips into China.
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Finding strong evidence that Yu, Wang, and Chen were suspected of offenses including document forgery, prosecutors argued there was a risk they might flee, destroy evidence, or collude with accomplices or witnesses. The court approved their request for pretrial detention without visitation rights.
After reviewing additional evidence, lead prosecutor Hsiao Yung-li (蕭詠勵) directed officers from the Keelung Investigation Unit of the Coast Guard Administration’s Investigation Branch, along with other agencies, to launch a second round of searches beginning on June 29.
Investigators searched 12 locations, including: The Taiwan Asia-Pacific headquarters of Super Micro Computer (Supermicro) in Zhonghe District, New Taipei City; Aaeon Technology Co., Ltd., a Supermicro distributor; Chief Telecom Inc.; and the residences of individuals connected to the case.
Authorities questioned six people, including: Lu, the general manager of Aaeon Technology; Four Supermicro employees responsible for sales; and Tsai, an employee of Chief Telecom who was interviewed at a hospital while receiving medical treatment.
With the exception of Tsai, who remained hospitalized, the other five individuals were taken to the Keelung District Prosecutors Office for further questioning.
After questioning the suspects, prosecutors concluded that they were suspected of document forgery and breach of trust. They ordered the release on bail of Mr. Wang and Ms. Chu, both employees of Supermicro, with bail set at NT$100,000 and NT$50,000, respectively.
Prosecutors also petitioned the Keelung District Court to place Mr. Lu, Mr. Lin of Supermicro, and Mr. Wang of Supermicro in pretrial detention without visitation or communication.
After holding a detention hearing, the judge found there was strong probable cause to believe the three had committed the alleged offenses and that there were sufficient grounds to believe they posed a flight risk and risk of colluding with witnesses or tampering with evidence. The court therefore ordered all three into pretrial detention without visitation or communication.
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Aaeon and Chief Telecom issue statements, say operations remain unaffected
Aaeon’s share price hit the daily limit-down for a second consecutive trading day, closing at NT$425 on July 1. Meanwhile, shares of Chief Telecom initially fell by 1 percent before rebounding to close 2.11 percent higher at NT$339.
According to Taiwan’s Economic Daily News, Aaeon Technology issued a statement on July 1 saying that its general manager, Lu Yang-kai, had been placed in pretrial detention while cooperating with prosecutors in the investigation. The company announced that Lu had been suspended from his duties effective immediately.
Aaeon further announced that Chiu Chen-chen had been appointed acting general manager, while Wang Lung-yi would serve as the company’s spokesperson on an interim basis.
The company said it has always adhered to the principles of integrity and legal compliance. It stated that it has exercised great caution in distributing and selling export-controlled AI server products, consistently complying with export-control regulations through multiple layers of internal review and oversight.
However, Aaeon said it had been deceived and exploited by individuals acting in bad faith, who illegally diverted export-controlled products to restricted destinations. The company pledged to fully cooperate with prosecutors, conduct an internal review, and strengthen its compliance and control procedures.
Aaeon added that its operations remain normal and that the incident has had no material impact on the company’s financial position. It also criticized some media outlets for publishing misleading headlines with ambiguous wording that confused the facts or misattributed responsibility, saying it issued the statement to protect the interests of the company and its shareholders while expressing hope that judicial authorities would clarify the facts as soon as possible.
Separately, Chief Telecom also released a statement, saying that it is a data center service provider and has no authority to intervene in or manage customers’ equipment.
The company said it has fulfilled its obligations by applying Know Your Customer (KYC) procedures and making the required notifications regarding customers associated with suspected irregular AI equipment.
Chief Telecom emphasized that it bears no responsibility for its customers’ conduct. It also noted that its official website already contains special management guidelines for AI data center equipment, designed to support the government’s efforts to combat the illegal export of AI equipment by customers.
The company added that its operations continue as normal and that the incident has had no material impact on its business or financial performance.
