Ting-Wei “Willy” Sun, a contractor linked to U.S. server maker Super Micro Computer, pleaded guilty on Thursday, October 8, 2026, before a federal court in Manhattan for his role in a scheme to illegally export to China servers equipped with advanced Nvidia artificial intelligence chips. The plea became known the next day through a court filing, Reuters reported.
Sun admitted four counts: conspiracy to violate U.S. export controls, conspiracy to smuggle goods from the country, conspiracy to defraud the United States and obstruction of justice. According to Bloomberg, he pleaded guilty as part of an agreement with prosecutors. His lawyer declined to comment.
The case dates back to March 19, 2026, when the Justice Department unsealed an indictment against three people: Yih-Shyan “Wally” Liaw, who co-founded Super Micro in 1993 and joined its board in 2023; Ruei-Tsang “Steven” Chang, a manager at the company’s Taiwan office; and Sun himself, whom the indictment describes as an outside broker and “fixer.” Liaw and Sun were arrested at the time; Chang remains a fugitive, according to the Justice Department.
According to the indictment, the scheme worked like this. Liaw and Chang, in coordination with brokers who had customers in China, directed executives of a company in Southeast Asia, identified as “Company-1,” to order servers with certain graphics processors, supposedly for its own use. The equipment, often assembled in the United States, was shipped to the manufacturer’s facilities in Taiwan and then to Company-1, which with the help of a logistics firm repackaged it in unmarked boxes and sent it to China.
To get the manufacturer to approve those orders internally, those involved prepared false documents presenting Company-1 as the end user of the servers. Between 2024 and 2025, that company bought about $2.5 billion in servers, and prosecutors say the scheme became increasingly brazen. Between late April and mid-May 2025 alone, at least about $510 million in U.S.-assembled servers ended up in China in violation of the law.
The most striking episode in the indictment involves fake servers. To deceive the manufacturer’s compliance team, the defendants allegedly placed thousands of non-working replica servers in the warehouses where Company-1 claimed to store the equipment it had bought, while the real ones were already in China. Those replicas were used in an internal audit in August 2025 and later in an attempt to pass an inspection by the Commerce Department.
According to the Justice Department, before that inspection Sun and another broker unboxed the fake servers, used a hair dryer to remove and reattach labels and serial numbers, and repackaged them in the manufacturer’s boxes. Surveillance cameras recorded their work. Reuters adds, citing the indictment, that Sun helped stage that equipment in December 2025 and made false statements to a Commerce officer during the inspection.
The chips involved are Nvidia’s B200, H100 and H200 graphics processors, which are subject to export restrictions. Washington limits sales of the most advanced artificial intelligence chips to China on national security grounds, considering that their computing power could contribute significantly to other countries’ military potential. At no point, according to prosecutors, did the defendants or the manufacturer have a license to export those servers to China.
California-based Super Micro referred to earlier statements stressing that the company is not named as a defendant and that the case has not affected its operations. The company fired Sun and cut ties with the other defendants earlier this year. Liaw’s lawyer did not immediately respond to requests for comment, and Chang’s lawyer could not be reached.
When the indictment was filed, the U.S. Attorney for the Southern District of New York, Jay Clayton, said the defendants acted through “a tangled web of lies, obfuscation, and concealment” to drive sales in violation of the law. Assistant Attorney General for National Security John A. Eisenberg said these chips are “the product of American ingenuity” and that his division will keep enforcing export control laws to protect that advantage.
The charges in the original indictment carry maximum sentences of 20 years in prison for conspiring to violate the Export Control Reform Act and five years each for the smuggling and fraud counts, although the final sentence will be decided by a judge. Liaw and Chang remain presumed innocent unless proven guilty. Sun’s guilty plea, as someone described as a key figure in the scheme’s logistics, could carry weight in the rest of the case.
The case is part of the competition between the United States and China for leadership in artificial intelligence, in which both countries are investing billions of dollars. Chip export controls are one of Washington’s main tools to slow China’s progress, and smuggling through third countries has become their weak point. It is not an isolated case: in recent months U.S. prosecutors have brought other charges over smuggling Nvidia chips to China.
For the industry, the episode is a warning about how hard it is to control the final destination of highly sought-after hardware that passes through several hands and countries. Manufacturers are being forced to strengthen their internal controls, while regulators look for new forms of verification. Sun’s guilty plea shows that these investigations can go far, but also that, for months, servers worth billions of dollars managed to cross borders undetected.
