TAIPEI – Taiwanese prosecutors detained two Super Micro Computer employees following a raid of the US company’s local offices earlier this week over alleged shipments of Nvidia chips to China.

Prosecutors are investigating four Super Micro employees for falsifying documents and breach of trust, a person familiar with the matter said.

The Keelung District Court agreed to the prosecutors’ request to detain two of them, while the other two were released on bail but restricted from leaving Taiwan, the person added, declining to be named as details are private. 

Super Micro confirmed that two employees have been detained and two have been released on bail. It has placed all four on administrative leave pending the conclusion of the investigation.

“We have zero tolerance for anyone who violates the law or our internal policies,” the company said on July 1 in an open letter to customers that Super Micro posted on its website.  

The person familiar said a manager at Super Micro distributor Albatron Technology has also been detained. Albatron confirmed the detention of a manager in a filing on July 1.

An employee of data centre operator Chief Telecom was also questioned earlier this week, the person said.

In the letter, Super Micro said the company is not the target of the investigation and it has given investigators access to employees’ devices and systems, and disagreed with reports calling the action at its offices a raid.

“The relevant authorities have confirmed that Supermicro is not a target of this investigation,” the company wrote.

“In fact, we have been providing information to and working in cooperation with Taiwanese authorities for several months to assist in their efforts.”

The allegations came after local investigators raided the residences of all six people and the offices of Super Micro, Albatron and Chief Telecom on June 29 as part of the ongoing China chip smuggling probe.

On June 29, after the raids, Super Micro said “we continue to cooperate with law enforcement and government officials in Taiwan and other jurisdictions”.

In its letter to customers on July 1, the company wrote that “we do not have the full visibility of the investigation as it is ongoing”, adding the probe “has absolutely no impact on our ability to serve and support you”.

Chief Telecom said on June 29 that it is cooperating with the investigation, adding that operations remain normal with no material impact on its finances or business. 

A court official on July 1 confirmed that three individuals have been detained but declined to provide additional details. The United Daily News and other media also reported on the company affiliations of the detained individuals.

Those taken into custody this week are in addition to three other detentions in May in connection with the ongoing investigation.

They were the first known detentions of alleged chip smugglers, also on suspicion of falsification of documents related to exports of Super Micro servers containing Nvidia’s much-coveted AI chips. 

The three detained in May are suspected of successfully sending at least one batch of Nvidia chips to China, and of attempting to export around 50 servers that were seized before they left the island. 

Taiwan does not currently treat AI chip exports to China as a crime, but is mindful of the risk of providing high-end technology to a country that periodically threatens the self-ruled democracy with invasion.

Taiwan’s main defence guarantor, the US, is also pushing to restrict Beijing’s access to AI technology.

While Taiwan authorities warn potential sellers to China that they may be breaking US rules should they proceed, the only legal recourse through the island’s courts now is to charge suspected smugglers with violations of other, existing local laws.

Taipei is now considering criminalising exports themselves, which would give local prosecutors more tools to go after the illicit trade. BLOOMBERG