Supermicro CEO Says No One Else Involved in $2.5 bn Server Smuggling Case

Supermicro CEO asserts only indicted staff involved in $2.5 bn export case

During the fiscal Q3 earnings call, Supermicro CEO Charles Liang told analysts that, based on current knowledge, “no one” beyond the three employees named in the Department of Justice indictment participated in the alleged $2.5 billion server smuggling scheme. The remark came as the stock jumped ↑18% in after‑hours trading.

“We have very good confidence in our integrity,” Liang said.

Analysts pressed VP Michael Staiger on potential restatements; he replied that the company does not anticipate any adjustments and reiterated that Supermicro itself was not listed in the federal indictment. Liang added that the internal, board‑led probe, overseen by lead independent director Scott Angel and audit chair Tally Liu, remains ongoing.

Federal prosecutors allege that co‑founder Yih‑Shyan “Wally” Liaw orchestrated a complex operation that routed servers equipped with Nvidia GPUs to China, using counterfeit shipping labels and staged warehouses. Liaw, who has pleaded not guilty, is out on a $5 million bond.

Despite the legal turbulence, Supermicro reported Q3 revenue of $10.2 billion, though it fell ↓19% from the prior quarter due to short‑term data‑center delays. Gross margin improved to 10.1% from 6.4%, and non‑GAAP diluted EPS hit $0.84, beating the $0.60 forecast.

Liang assured investors that relationships with key suppliers—including Nvidia, AMD, Intel and Broadcom—remain “strong, if not stronger.” He emphasized that Supermicro is not a defendant, has zero tolerance for violations, and expects revenue of $11 billion to $12.5 billion in Q4, with a full‑year target of $38.9 billion to $40.4 billion.

For further details, see Reuters and Bloomberg.