Supermicro CEO asserts that only indicted employees were involved in the alleged $2.5 billion smuggling scheme

(SeaPRwire) –   During the company’s fiscal third-quarter earnings call, Super Micro Computer CEO Charles Liang made a statement. He asserted that “no one” at the firm, aside from the three indicted employees—including cofounder Yih-Shyan “Wally” Liaw—was involved in what prosecutors describe as a complex plot to illegally ship servers to China, breaching U.S. export controls. Following these remarks, the stock increased by 18% in after-hours trading.

This earnings call on Tuesday marked the first since Liaw and two other individuals were charged in a criminal probe concerning U.S. export laws and an alleged operation to smuggle $2.5 billion worth of servers into China.

At the beginning of the call, Michael Staiger, the Vice President of Corporate Development, told analysts that the Q&A segment would concentrate on financial performance. Despite this, analysts immediately began the Q&A by asking about the repercussions of the indictment. Staiger stated that, based on current information, Supermicro does not anticipate needing to restate its earnings and does not believe additional employees were implicated.

When another analyst later revisited the subject of the investigation and its effect on the business, Staiger tried to politely deflect the inquiry by referring back to his previous statement that Supermicro was not named in the federal indictment. He added that the company had nothing further to share, other than that it is treating the accusations “seriously” and has launched an internal, board-led investigation into the alleged behavior of the implicated individuals.

At that point, CEO, Chairman, and co-founder Charles Liang interjected.

“Based on our current knowledge, which may evolve as the inquiry continues, no one from the company other than those named in the DOJ indictment was involved,” Liang stated. “So we have very good confidence in our integrity.”

Liang provided no evidence for his claim nor attributed it to legal counsel or authorities. Since Liang is part of executive management and the probe is being overseen by lead independent director Scott Angel and audit chair Tally Liu, it is uncertain what details from the ongoing investigation would enable him to assert that no other Supermicro personnel were involved beyond the three charged.

A Supermicro public relations representative did not provide further details but pointed out that Liang had conditioned his remark by saying it was based on the company’s present understanding and was subject to change.

The company has been facing claims that a senior vice president and board member—since terminated—orchestrated and assisted in a sophisticated plan to breach export controls. In March, the U.S. Department of Justice charged Liaw and two other employees with unlawfully directing servers containing Nvidia GPUs to China.

Federal prosecutors allege that Liaw hid the scheme from the company’s auditors and management, deceiving compliance inspectors with a warehouse he supposedly set up containing thousands of counterfeit servers. The defendants are accused of using hair dryers to remove shipping labels from packages to establish these fake warehouses, facilitating the illegal shipment of servers to China in 2024 and 2025. The alleged scheme encompassed $2.5 billion in server hardware and highly sought-after Nvidia GPUs.

Liang and Supermicro were not charged in the indictment; Liaw has entered a plea of not guilty and was released on a $5 million bond.

On April 7, after Liaw’s indictment, the company declared it would initiate an independent, board-led investigation into the DOJ’s allegations. However, the announcement specified that the inquiry has “no definitive timetable” and an update will be provided only upon its conclusion.

“I am personally shocked and saddened”

Earlier on Tuesday, as Supermicro released its Q3 fiscal 2026 results, Liang attempted to separate himself from Liaw, with whom he co-founded the company in 1993 alongside his wife, Sara Liu. Liu was also not named in the indictment.

“I must be clear. Supermicro is not a defendant, nor a target of a grand jury investigation, and Supermicro has zero tolerance for any employee who violates federal law and regulation,” Liang said at the outset of the analyst call. “I am personally shocked and saddened by these alleged actions, which in no way represent the values or ethics of this company.”

Liang also worked to assure analysts that Supermicro’s vendor relationships, including with the $5 trillion company Nvidia, remain “strong.” The indictment prompted concerns about Supermicro’s ongoing access to Nvidia GPUs.

Liang noted that the company’s partnerships with GPU and component suppliers like Nvidia, AMD, Intel, and Broadcom are long-standing.

“We feel our partnership will stay as strong, if not stronger, at least as strong as before,” Liang commented. “We continue to work together on lots of new projects.”

Chief Financial Officer David Weigand confirmed this, stating, “Our understanding is there is no change in allocation.”

Liang also told analysts that most customers feel “pretty solid” about maintaining their business with Supermicro and continuing to “grow together.”

Supermicro reported Q3 revenue of $10.2 billion, a 123% increase compared to the same period last year, but a 19% decrease from the previous quarter. The company attributed the quarterly decline to temporary delays from customers whose data centers lacked the necessary power and networking infrastructure for server installations. Supermicro anticipates recognizing this deferred revenue in future quarters.

Furthermore, the company’s gross margins, a historical concern for investors, improved to 10.1%, up from 6.4% in the prior quarter. Liang explained this improvement was due to a shift in customer base towards enterprise buyers and away from a single hyperscaler, whose contribution to revenue dropped from 63% to 27%. Non-GAAP diluted earnings per share were $0.84, exceeding the company’s guidance of at least $0.60.

Importantly, Supermicro provided Q4 revenue guidance of $11 billion to $12.5 billion and raised its full-year fiscal 2026 forecast to a range of $38.9 billion to $40.4 billion.