Taiwan Detains Nvidia Manager, Seizes 50 AI Servers in Chip Smuggling Probe

The Keelung District Prosecutors Office in Taiwan announced on Tuesday (July 28) that during an investigation into the alleged illegal export of Supermicro AI servers to mainland China, prosecutor Hsiao Yung-li on July 24 directed the Taipei City Investigation Office of the Ministry of Justice Investigation Bureau to search Nvidia's offices and the residence of a business manager surnamed Zhang. After questioning, the prosecutor determined that Zhang was a major suspect with a high risk of fleeing or destroying evidence, arrested him immediately, and successfully petitioned the court for his detention without bail. This marks the third wave of searches by Taiwanese prosecutors in the Nvidia illegal export case. Zhang became the seventh defendant to be detained without bail since the first wave of searches on May 20. The case originated from Qingyun's US-based client shipping advanced Nvidia AI chips to mainland China. The US indicted the co-founder of that US company, its Taiwan regional business manager, and a contractor on March 19 this year. On May 20, the Keelung District Prosecutors Office launched the first wave of searches at 12 locations, including the residences and offices of three men surnamed Yu, Wang, and Chen. At warehouses in Keelung and Neihu, prosecutors seized 50 AI servers equipped with Nvidia's high-end GB300 chips, which the group had purchased from Supermicro with 700 million New Taiwan dollars but had not yet smuggled out. They also seized over 9 million New Taiwan dollars in cash. However, prosecutors suspect that the three men had previously shipped another batch of servers containing Nvidia AI chips from Keelung to Japan, with the final destination being Hong Kong, a transit point for hardware entering mainland China. Prosecutors are now tracing the entire smuggling chain. On June 29, the Keelung District Prosecutors Office launched a second wave of searches, targeting the listed company Qingyun and Supermicro. They summoned a general manager surnamed Lyu, a Supermicro business manager surnamed Wang, and three female sales representatives surnamed Lin, Wang, and Zhu. The prosecutors determined that the five were suspected of forgery and other crimes, and successfully petitioned the court to detain Lyu, Wang, and Lin without bail due to risk of collusion and evidence destruction. The two sales representatives surnamed Wang and Zhu were released on bail of 100,000 and 50,000 New Taiwan dollars, respectively. The investigation into the alleged smuggling of high-end Supermicro AI servers to Hong Kong, Macau, and mainland China is nearing completion, and related investigative actions have concluded. The case is expected to be concluded and charges filed soon.