Super Micro Shares Plunge 25% After Co-Founder Charged in $2.5B Smuggling Plot

alephnerd

Oof. SuperMicro also had it's hardware supply chain compromised back in the 2010s [0][1][2][3] [0] - https://www.bloomberg.com/news/features/2018-10-04/the-big-h... [1] - https://www.bloomberg.com/features/2021-supermicro/ [2] - https://www.schneier.com/blog/archives/2021/02/chinese-suppl... [3] - https://www.theinformation.com/articles/apple-severed-ties-w...

vicchenai

The timing is brutal - SMCI already had the accounting restatement scandal in 2024, spent months fighting delisting, finally got somewhat rehabilitated in the AI infrastructure boom... and now this. 25% single-day drop on a company that was already trading at a discount to peers tells you the market was still pricing in tail risk. For anyone tracking institutional holdings - the 13F filings from Q4 showed several funds adding back SMCI after the accounting mess cleared up. Those bets just got very painful.

dwa3592

https://substack.com/home/post/p-191531928

evanjrowley

It's sad to see what's happened to SuperMicro. They were one of the few vendors of server-grade hardware fitting standard ATX, mATX, and ITX form factors. In my experience their hardware was always better than the others who attempted to do the same (Gigabyte, Asus, ASRock). These days, motherboards with the features I want are going to be on AliExpress. Ironic considering this latest news is about putting trade barriers between the US and mainland China.

int32_64

Remember when Singapore buyers were an abnormally high percentage of nvidia's revenue? You have to wonder if these companies are this brazen because they know the DoJ will have political pressure not to nuke the bubble which is more important than being China hawks.

simonebrunozzi

So, good time to buy on the panic?

simonw

I'd been assuming that the Chinese AI labs producing excellent LLMs despite the NVIDIA export restrictions was due to them finding new optimizations for training against the hardware they had access to. I wonder if any of those $2.5B of smuggled chips ended up being used for those training runs.

Namahanna

The Gamers Nexus GPU Blackmarket deep dive was great at digging into this. https://www.youtube.com/watch?v=1H3xQaf7BFI And the entire Bloomberg takedown drama added fire to the flames.

maxglute

They need a new logo.

phendrenad2

Maybe it's time to re-visit that "spy chip" story from almost a decade ago. Edit: Officially-debunked, I should note

latchkey

I've had my own dealings with this awful company. Including Wally. Let's just say that none of this comes as any surprise. Now, what people should be asking is how much Jensen knew. In May he said there was nothing going on. But the videos of the Chinese guy holding H1/200's ... never got to him? Also interesting how they waited until just after GTC...

throwaw12

(I don't understand hardware well) Can someone shed light on why China still couldn't copy the Nvidia GPUs in some form? I understand its complex and there many parts to it, but which is the most complex part making it difficult for China to copy it? Let's say they don't have access to 3nm process, what if they just use 12nm and create GPUs with much bigger size but comparable performance with CUDA compatibility? Or other option could be less tensor units, training will take longer, but they might be able to produce it cheaply

markhahn

interesting that the stock market (a subset of the prediction market now, right?) would even care, or would take this as a negative. "sorry guys, I did something token-bad a while ago that got you more money." that's the sort of meaculpa I'd expect to get rewarded these days...

hereme888

Having a net worth of ~$474 million just isn't enough for some people, I guess.

throwaway27448

Violating sanctions isn't exactly the same thing as smuggling. It also doesn't seem like it should be a crime to disagree with your state on who deserves what service... i never voted for the dingbats who control who is called a terrorist, let alone the people scared of china.

Razengan

For a split second I read that as Super Mario shares

deepsquirrelnet

This is even after the Hindenburg research report that found numerous screaming red flags a few years ago. https://hindenburgresearch.com/smci/

whacko_quacko

Not a fan of trade barriers, but love it when CEOs go to jail for ignoring the law. Now start enforcing copyright laws against AI companies please <3 A (classically) liberal society can only work if everyone is held to the same standard of the law.

vicchenai

Wild timing on this. SMCI was already under scrutiny from the accounting issues last year, and now this. Institutional holders have been quietly reducing positions over the last two quarters if you check the 13F filings. Sometimes the smart money exit is the real signal.