Super Micro (SMCI) Stock Drops 6% As Taiwan Detains Workers in Chip Smuggling Probe

TLDR

• Two Super Micro Taiwan employees were detained pending a court hearing; two others released on bail following questioning by Taiwanese prosecutors.
• The probe centers on alleged illegal export of Nvidia-powered AI servers to China, violating U.S. export controls.
• SMCI stock dropped 5.7% to $27.65, with trading volume up 15% above its daily average.
• Super Micro says it is not a target of the investigation and has been cooperating with Taiwanese authorities for several months.
• Wall Street holds a consensus “Hold” rating on SMCI with a price target of $38.57.

Super Micro Computer (SMCI) stock dropped 5.7% on Wednesday, hitting a low of $27.48 before closing at $27.65, down from a prior close of $29.33. Volume spiked to over 50 million — about 15% above the daily average.

Super Micro Computer, Inc., SMCI

The selloff came after Taiwanese prosecutors detained two Super Micro Taiwan employees pending a court hearing. Two others were questioned and released on bail.

The four were among six people questioned on June 29 by Taiwan’s Keelung District Prosecutors’ Office, which has been running an ongoing probe into the alleged illegal export of AI servers containing Nvidia chips to China.

Those servers are subject to U.S. export controls that prohibit their sale into China.

Prosecutors searched 12 locations, including the homes of six suspects and offices of three companies — Super Micro Taiwan, distributor Albatron Technology, and data centre operator Chief Telecom.

Super Micro’s Chief Revenue Officer Matthew Thauberger addressed the situation in a letter to U.S. customers, confirming the detentions and stating that all four employees had been placed on administrative leave.

The company says it has been cooperating with Taiwanese authorities for several months, including providing access to employee desks and electronic devices.

A Growing Investigation

This is the second round of the Taiwan probe. In May, three people were detained on suspicion of illegally exporting Super Micro’s high-end AI servers — those individuals remain in detention.

The legal pressure goes beyond Taiwan. In March, the U.S. Justice Department charged three people connected to Super Micro, including a co-founder, with helping smuggle at least $2.5 billion worth of U.S. AI technology to China in breach of export laws.

Super Micro said in May that cooperation with Taiwanese authorities had led to the seizure of 50 servers that had been “deceptively acquired” after being sold to an authorised reseller.

What Analysts Think

Despite the pressure, analyst opinion is mixed. The stock carries a consensus “Hold” rating based on coverage from 18 analysts — four Buy, twelve Hold, two Sell — with an average price target of $38.57.

Needham maintains a Buy rating with a $40 target. Citigroup holds a Neutral rating with a $31 target. Argus has a Hold. Wolfe Research, which initiated coverage in June, issued a “Peer Perform” rating.

On the fundamentals side, Super Micro’s most recent quarterly results showed revenue of $10.24 billion, up 122.7% year-over-year. EPS came in at $0.84, beating the $0.63 estimate by $0.21. Q4 2026 EPS guidance is set at $0.65–$0.79.

The stock’s 50-day moving average sits at $33.73, and its 200-day moving average is $30.95 — both well above current trading levels.

Institutional investors hold 84.06% of the stock, with several funds adding to positions in the second quarter.

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