SMCI Stock 28% as US Charges Co-Founder Over $2.5B China Export Scheme

2026-03-20 - 16:51

Super Micro Computer shares dropped 28 percent Friday. Federal prosecutors charged a company co-founder. The U.S. Justice Department alleged the executive ran a $2.5 billion smuggling operation. The group allegedly shipped restricted artificial intelligence processors into China. The U.S. Attorney’s Office for the Southern District of New York unsealed the indictment on Thursday. Prosecutors charged Yih-Shyan Liaw. Liaw serves as a co-founder and board member of the company. Authorities also charged a sales manager and an outside contractor. The government claims the trio sold $2.5 billion in servers. They shipped the hardware to a Southeast Asian company between 2024 and 2025. The buyers planned to forward the equipment to China. John A. Eisenberg serves as the Assistant Attorney General for National Security. He detailed the methods used by the executives. “The indictment unsealed today details alleged efforts to evade U.S. export laws,” Eisenberg said Thursday. He noted the group used false documents and staged dummy servers to mislead inspectors. Super Micro stock plummeted to $22.15 during Friday morning trading. The massive selloff erased $5 billion from the company’s market capitalization. Market capitalization is the total dollar value of all outstanding shares of stock. Trading volume — the total number of shares traded — spiked heavily as investors rushed to sell. The U.S. government tightly controls sales of advanced graphics processing units. Graphics processing units serve as the primary brains of modern artificial intelligence systems. Super Micro builds massive metal server racks that house these specialized Nvidia processors. Any federal ban on buying or selling these components would cripple Super Micro’s operations. Mark Newman works as an analyst at Bernstein. He highlighted the severe reputational damage. “Despite SMCI not being named as a defendant, this raises serious credibility issues,” Newman wrote Friday. Bernstein maintained a $37 price target — an analyst’s estimate of a stock’s future value — on the shares. Investigators have not named the specific Southeast Asian company used as the middleman. The Justice Department has not announced any corporate financial penalties against Super Micro.