Taiwanese investigators have raided the Taiwan offices of US company Super Micro Computer and two other technology firms, a prosecutor said on Tuesday, as part of a widening probe into the alleged smuggling of Nvidia AI chips into China.
Prosecutors said in May they were investigating the shipment of “high-end” artificial intelligence servers containing advanced Nvidia chips to China, Macau and Hong Kong in violation of US export controls.
Nine people are now under investigation, up from three previously, Huang Sheng, chief prosecutor at the Keelung Prosecutor’s Office, told AFP.
They are accused of falsifying documents so they could ship approximately 50 servers manufactured by Super Micro Computer to China.
Some of the servers were cleared by Taiwan customs and sent to China via Japan, an official previously told AFP on condition of anonymity.
Twelve locations were raided on Monday as part of the investigation, the prosecutor’s office said in a statement.
They included the homes of six people and the offices of the companies they worked for – Nasdaq-listed Super Micro Computer and Taiwan-listed firms Albatron Technology and Chief Telecom.
The United States restricts the export of its latest AI chips to China, in part because of concerns that the technology could be used by Beijing’s military.
But it is not a criminal offense in Taiwan – a situation that lawmakers and experts say needs to change – with Taiwanese prosecutors relying on other laws to pursue offenders.
Lawmaker Chung Chia-pin, who belongs to President Lai Ching-te’s Democratic Progressive Party (DPP), plans to propose an amendment to the Foreign Trade Act to include a “Mainland China semiconductor chip clause” that would make it illegal to export chips there.
Chung told AFP on Tuesday that a loophole in the law was created under former president Ma Ying-jeou, who belongs to the Kuomintang party, and successive DPP-led governments have failed to close it.
Shares fall sharply
High-end chips made by US titan Nvidia – the world’s most valuable company – are used to train and run AI systems.
In response to Washington’s export restrictions, China has accelerated efforts to develop its own artificial intelligence chips and break away from reliance on American hardware.
This month, Taiwan’s Vice Minister of Economic Affairs Ho Chin-tsang said Taiwan and the United States “will work to implement our shared export control goals,” but the government did not elaborate.
Chris McGuire, an expert on China and AI at the US-based Council on Foreign Relations, said chip smuggling was a “really significant problem” in Taiwan and Southeast Asia.
“It’s really, really important that allies align with the United States on all these policies and also legal authorities,” McGuire, who served on the National Security Council under former US President Joe Biden, said at a forum in Taipei this month.
“It’s not a criminal offense in Taiwan to export AI chips to China, obviously it is under US law, but it’s not under Taiwanese law. That has to change, right?”
Super Micro Computer, Albatron Technology and Chief Telecom have separately said they are cooperating with investigators. Their shares have fallen sharply this week.
Prosecutors say it’s too early to tell if the case is related to an Nvidia chip smuggling case involving Super Micro Computer employees in the United States.
A US indictment unsealed in March showed that company employees allegedly raked in billions of dollars by diverting Nvidia AI chips to China in violation of export controls.
