Taiwan Detains Nvidia Employee in China Chip Smuggling Probe

Taiwan Prosecutors Detain Nvidia Staffer in Advanced AI Chip Smuggling Probe

According to cnbctv18.com, local investigators searched Chang’s home and his desk at Nvidia’s Taipei office. Prosecutors subsequently requested and received court approval to detain Chang amid concerns that he could flee, destroy evidence, or collude with accomplices. The prosecutor’s statement does not accuse Nvidia or any other corporate entity of wrongdoing, but notes that the detained employee is suspected of criminal offenses including the falsification of documents and breach of trust.

Wider Investigation Into Super Micro Servers and Supply Chain Routes

The latest detention marks a significant escalation in a probe that previously centered on server manufacturer Super Micro Computer. According to straitstimes.com, seven people are now being held as part of the ongoing investigation, including the Nvidia employee, individuals from Super Micro, and a representative from Taiwan-listed Albatron Technology. Authorities allege the network forged documents to ship approximately 50 servers made by Super Micro to China. Some of these servers were cleared by Taiwan Customs and sent to China via Japan, an official previously told AFP.

The investigation into server routing began months earlier, with Taiwanese authorities executing initial search operations and detentions in May and June. Devdiscourse reported that the legal authorities intensified their work as part of the third phase of the probe. Because Taiwan lacks a specific law directly criminalizing the export of AI chips to China, local prosecutors have relied on charges of document forgery and breach of trust under the Criminal Code.

U.S. Export Controls and International Parallel Cases

The United States restricts the export of its most cutting-edge silicon chips used to power artificial intelligence systems to China. The current Taiwanese proceedings run in parallel with United States actions. In March, the U.S. Department of Justice announced it had charged three people, including Super Micro co-founder Yih-Shyan “Wally” Liaw, with violating U.S. export control law, conspiring to smuggle goods from the U.S., and conspiring to defraud the U.S.

According to Barron’s, the U.S. case alleged that the trio diverted advanced servers assembled in the U.S. with sophisticated American AI chips to China through a Southeast Asian company, generating $2.5 billion in revenue for Super Micro. Super Micro previously stated it was not named as a defendant, noted that the alleged conduct violated its compliance controls, placed implicated staff on administrative leave, and severed ties with the charged contractor.

Nvidia Response and Industry Compliance Measures

In response to inquiries regarding the probe, an Nvidia spokesperson stated that smuggling is a “nonstarter” for the company. The spokesperson added that Nvidia primarily sells its products to well-known partners, including original equipment manufacturers, to ensure sales comply with U.S. export control rules. Furthermore, the company asserted that any diverted chips would receive no service, support, or updates.