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Taiwanese Prosecutors Detain 3, Seize 50 Servers
Taiwanese prosecutors have detained three suspects and are investigating them on suspicion of smuggling Nvidia artificial intelligence (AI) chips, which are subject to US export restrictions to China, to China via Japan, Bloomberg reported on the 27th.
Citing sources, Bloomberg reported that the Keelung District Prosecutors Office in Taiwan detained the three last week and seized approximately 50 Supermicro servers equipped with advanced Nvidia chips.
They are suspected of forging export documents related to servers, which are items requiring US export permits to China.
In addition to the approximately 50 servers seized by Taiwanese authorities this time, at least one separate shipment that departed earlier was found to have already cleared Taiwanese customs. This shipment entered Hong Kong, known as a major transit point for hardware bound for mainland China via Japan, according to sources.
Supermicro Computer, headquartered in Silicon Valley, USA, is a prominent Taiwanese-American company founded by Charles Liang, a Taiwanese immigrant and CEO.
The suspects were reportedly planning to smuggle the seized server shipment out of Taiwan through the same Japan transit route.
This investigation is reportedly the first case where Japan has been identified as a transit point for AI chip smuggling. Previous cases of detection primarily focused on indirect exports via Southeast Asia.
The United States has been controlling the export of AI chips to China since 2022, due to concerns that AI technology could bolster China's military capabilities. While Chinese companies sometimes legally circumvent these controls by leasing servers owned by foreign companies installed in overseas data centers, Washington believes that a significant amount of domestic entry occurs through smuggling.
Taiwan has applied its domestic laws as it does not have its own semiconductor export control regulations, and this crackdown is the first public response by Taiwanese authorities following pressure from the US.
Nvidia CEO Jensen Huang arrived in Taipei, Taiwan, on the same day and told reporters, "We are strictly explaining the regulations to all our partners," and urged Supermicro Computer to "strengthen compliance to prevent such incidents from recurring."
Supermicro Computer stated, "We operate a strong compliance system through strict due diligence."
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