Supermicro Computer CEO Charles Liang addressed allegations of a $2.5 billion server smuggling scheme during the company's fiscal third-quarter earnings call, insisting that only three indicted employees were involved. The federal indictment alleges that co-founder Yih-Shyan ‘Wally’ Liaw and two others violated U.S. export controls by illegally routing servers to China.
CEO's Defense
Liang stated, 'Based on what we know so far, no one from the company other than those named in the DOJ indictment were involved.' He emphasized the company's 'very good confidence in our integrity,' though he acknowledged the situation could change as the investigation progresses. Liang did not provide evidence or cite legal counsel to support his claim.
Company's Response
Supermicro has initiated an internal, board-led investigation into the allegations, led by lead independent director Scott Angel and audit chair Tally Liu. VP of corporate development Michael Staiger reiterated that the company itself was not named in the indictment and does not anticipate restating earnings. Staiger declined to elaborate further, stating the company takes the allegations 'seriously.'
'I am personally shocked and saddened,' said Liang regarding the indictment of his co-founder Liaw.
The alleged scheme involved $2.5 billion in server hardware, including highly sought-after Nvidia GPUs, smuggled to China in 2024 and 2025. Prosecutors accused Liaw of concealing the operation from auditors and inspectors by creating fake warehouses filled with thousands of counterfeit servers.
Despite the ongoing investigation, Supermicro's stock rose 18% in after-hours trading following the earnings call. The company has not set a definitive timetable for concluding its internal probe.