Taiwanese authorities indict nine people over alleged chip smuggling scheme.
Taiwanese authorities have indicted nine people, including employees of Nvidia and Super Micro Computer, over their alleged involvement in the illegal export of artificial intelligence servers to China.
Eight of those indicted, including one employee of Nvidia’s Taiwan unit and two employees of Supermicro’s Taiwan unit, were charged with breach of trust and document forgery in connection with the illegal export of high-end AI servers, prosecutors in the port city of Keelung said in a statement on Monday.
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Of those servers, 50 were transshipped through Indonesia, eight were sent via Japan and the rest were exported directly to China, according to prosecutors.
An additional 56 servers were seized at Taiwan’s border, the statement said.
Three of the defendants have been charged with embezzlement.
Semiconductor powerhouse Taiwan is the world’s largest producer of advanced chips used in AI applications.
The United States restricts exports to China of the most cutting-edge silicon chips designed by industry leader Nvidia and used to power artificial intelligence systems.
But it is not a criminal offence in Taiwan, a situation lawmakers and experts say needs to change, with Taiwanese prosecutors relying on other laws to go after offenders.
Nvidia said its employees have “every incentive to work diligently with customers to ensure compliance with all applicable laws”, adding it would work with the Taiwan authorities to help them “resolve the allegations as quickly as possible”.
Supermicro said its cooperation with Taiwanese authorities led to the arrests of the indicted individuals, including two former employees of its Taiwan subsidiary.
“The Company continues to cooperate with Taiwan authorities, is not a target of their investigation and has not been accused of any wrongdoing,” it said in a statement.
Prosecutors said they were seeking sentences of up to five years in jail for seven defendants who were “driven by the pursuit of exorbitant profits” to collude in the illegal export of the servers.
“This not only increased corporate compliance costs but also severely damaged the nation’s international image,” the prosecutors said.
They said they were seeking more lenient sentences for the other two defendants who had confessed to all charges and cooperated with the investigation.
Taiwan has tightened export controls in recent years to keep advanced technology and know-how from reaching China, which claims the island as its own territory despite the strong objections of its government.