The Keelung District Prosecutors Office in Taiwan is investigating a major smuggling case involving Supermicro servers equipped with Nvidia’s high-end chips, which were allegedly diverted to China.
Authorities have conducted two raids and detained six suspects, including a Supermicro sales manager and senior executives of listed company Qyun Technology. An expanded investigation has found that the operation involved forces from the United States, China, and Taiwan.
The alleged mastermind behind the smuggling network is reportedly a mainland Chinese financier with a background linked to the Chinese military. Through Taiwanese organized crime figures acting as intermediaries, she allegedly made contact with U.S. technology companies, while shell companies placed orders with Taiwanese distributors. This model is believed to have been in operation for about three years.
Mysterious Chinese female financier with alleged PLA background allegedly orchestrated operation
According to Mirror Media, the entire smuggling network was allegedly directed by the Chinese People’s Liberation Army (PLA) through a mysterious female financier named “Dai Fei” (戴菲), who was connected with a male member of Taiwan’s Bamboo Union Gang (竹聯幫), surnamed Wang.
Three years ago, the group allegedly established a complex smuggling network. They placed orders through U.S. technology companies, while Taiwanese accomplices set up shell companies to conceal the true buyers. These shells then purchased servers equipped with Nvidia’s latest H100 chips from Supermicro’s Taiwanese distributor, Qyun Technology (青雲科技).
Success
You are now signed up for our newsletter
Success
Check your email to complete sign up
The group also allegedly rented data center facilities from Sifang Telecom to create the appearance that the servers remained in Taiwan. After completing inspections, the servers were secretly transported to China. Reports indicate that at least one batch of servers was shipped through Japan to Hong Kong before arriving at its ultimate destination. This method of evading detection is commonly referred to as “origin laundering” or “transshipment to disguise origin” (洗產地).
According to the report, the reason this smuggling chain was able to operate successfully for so long was allegedly due to Supermicro Taiwan sales manager Wang Xiangyi (王祥懿), who served as the key intermediary between the United States and Taiwan.
A former Supermicro executive identified only as Mr. B told Mirror Media that Wang Xiangyi had two relatives serving as senior executives at Supermicro’s headquarters in the United States. With their protection, he allegedly used internal connections and outside assistance to obtain the high-end Nvidia chip servers sought by Beijing.
According to Mr. B, the industrial chain was organized as follows: “Dai Fei provided the funding, Nick Shi placed the orders, Wang Xiangyi supplied the goods, and Wang Kaiping handled the smuggling.” The operation had allegedly been running for three years, turning Taiwan into an “illegal transit hub” for the Chinese Communist Party to obtain restricted chips. During this period, Wang Kaiping and others frequently traveled to Shanghai and Shenzhen in China. However, these trips, which appeared to be business visits, were reportedly mostly for meetings with Dai Fei and the distribution of illicit profits.
Sources familiar with the case stated that Wang Kaiping, who is currently detained, is linked to the “Yuren Association” (育仁會) under the Ren Hall (仁堂) faction of Taiwan’s Bamboo Union Gang (竹聯幫). He reportedly served primarily as a coordinator and intermediary in the smuggling operation. However, the true mastermind was allegedly the Chinese woman known as “Dai Fei,” who is suspected of having ties to the Chinese military and extensive knowledge of underground financial networks and import-export loopholes across mainland China, Taiwan, and Hong Kong. Investigators believe she may have received backing from Chinese Communist Party elements.
Smuggling group had sophisticated division of labor, allegedly earned $300 million over three years
According to Mirror Media, the smuggling group not only had a sophisticated division of labor but was also highly deceptive. The detained Supermicro sales manager Wang Xiangyi and other accomplices reportedly created a group chat on a mobile communications app. Although key conversations had already been deleted, investigators were able to restore the messages and found that the individuals had planned the operation in advance.
The restored conversations reportedly included instructions such as: “First place the purchased servers in Sifang Telecom’s data center. After Supermicro and Qyun complete their inspections, deal with them afterward.”
The group even had a set of guidelines for how to respond to inspections and investigations.
The investigation task force discovered that, in order to successfully obtain the high-end AI servers, the smuggling group followed the operational instructions found in their mobile chat records. They used U.S. technology companies to place orders, then rented server rooms from Sifang Telecom and requested assistance with server hosting. This created the false appearance that the servers had been purchased and remained in Taiwan, thereby deceiving inspectors.
Investigators have not ruled out the possibility that inspection personnel were aware of the scheme, and that the inspection process served merely as a staged formality. Afterward, the group allegedly fabricated false export documents, allowing them to swap out the servers and smuggle them into China. Preliminary estimates suggest the operation generated illegal profits of up to US$300 million.
Drug-smuggling investigation accidentally uncovers underground AI chip supply chain
The Keelung District Prosecutors Office, working under the direction of the Coast Guard Administration, originally targeted a transnational drug-smuggling route. During the investigation, authorities unexpectedly uncovered an underground supply chain allegedly involved in smuggling high-end Nvidia (NVIDIA) AI chips to China.
According to the Liberty Times, on May 20, the Keelung District Prosecutors Office conducted searches at 12 locations, including the residences and companies of three men surnamed You, Wang, and Chen. In warehouses in Keelung and Taipei, authorities seized 50 AI servers purchased from Supermicro — valued at approximately NT$700 million and equipped with Nvidia’s high-end GB300 chips — along with more than NT$9 million in cash.
On June 29, the investigation team carried out a second round of searches at 12 locations, including the Taiwan Asia-Pacific headquarters of Supermicro Computer Inc. in Zhonghe District, New Taipei City; Supermicro distributor Qyun International Technology Co., Ltd.; Sifang Telecom Co., Ltd.; and the residences of related individuals.
Authorities questioned Qyun Technology’s general manager, a man surnamed Lu; four Supermicro employees; and a Sifang Telecom employee surnamed Tsai who was interviewed at a hospital, bringing the total number of questioned individuals to six.
After prosecutors conducted further questioning, they ordered bail for a Supermicro employee surnamed Wang and a woman surnamed Zhu at NT$100,000 and NT$50,000, respectively, on suspicion of document forgery and breach of trust. Prosecutors then requested detention without visitation rights for Qyun executive Lu and two Supermicro employees surnamed Lin and Wang.
After questioning during detention hearings, the court determined that the three suspects faced significant criminal suspicion and posed risks of flight and collusion. The court therefore ordered their detention without visitation rights.
In response to the case, Supermicro Chief Revenue Officer Matt Thauberger issued a statement on July 2, stressing that the company is not the primary target of the investigation and confirming that four Taiwan-based employees involved have been suspended.
Chinese military seeks high-end Nvidia AI chips
Since 2022, the United States has imposed strict export controls on Nvidia’s high-end AI chips, forcing Nvidia to develop lower-specification versions of its chips specifically for the Chinese market. Although Beijing has publicly taken a tough stance, promoting domestic semiconductor substitution programs and launching investigations into Nvidia, China’s military and defense research institutions have privately shown an intense demand for top-tier computing power.
According to investigations by U.S. think tanks and Bloomberg, China’s so-called “Seven Sons of National Defense” universities — including Beihang University and Northwestern Polytechnical University, both on the U.S. export blacklist — have been actively seeking Nvidia’s high-end chips to accelerate weapons development and the training of military AI models.
