AI NVIDIA Chip Smuggling Case Progress: Mysterious Chinese Female Financier Appears, Drug Investigation Accidentally Reveals

The Keelung District Prosecutors Office, directing the Coast Guard Administration, originally investigating a transnational drug trafficking case, unexpectedly uncovered Taiwan's first case of smuggling high-end NVIDIA AI chips to China. The operation allegedly involved falsifying KYC documents to circumvent export controls, routing shipments through Japan to Hong Kong to disguise the country of origin, and resulted in the seizure of approximately 50 Supermicro servers valued at around NT$700 million. According to prosecutors and investigators, the smuggling chain has been operating for three years, with illegal proceeds potentially reaching NT$10 billion. The identity of the mysterious female financier behind the operation remains unknown, and the case is still under investigation.

(Previous report: Qingyun involved in NVIDIA AI smuggling case leads to general manager's resignation and distancing, suffering three consecutive daily limit-downs before locking at limit-up today)

(Background: Jensen Huang: Neither Blackwell nor Rubin should be accessible to China, NVIDIA's China market share drops to zero)

Table of Contents

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• Smuggling Chain Uncovered by Drug Investigation
• Mysterious Chinese Female Financier
• Legal Loophole Forces Prosecutors to Use Indirect Charges

Key Highlights

• Keelung prosecutors uncover chip smuggling chain during drug investigation, seizing servers worth approximately NT$700 million
• According to prosecutors, the smuggling chain operated for three years, with illegal proceeds potentially reaching NT$10 billion
• Mysterious female financier "Dai Fei" reportedly has ties to the Chinese military; Taiwan has no specific law to penalize chip smuggling to China

The Keelung District Prosecutors Office, directing the Coast Guard Administration, initially targeted a transnational drug trafficking channel. As the investigation progressed, it unexpectedly revealed Taiwan's first underground supply chain smuggling high-end NVIDIA AI chips to China. Prosecutors and investigators seized approximately 50 Supermicro high-end AI servers from two large warehouses in Keelung and Taipei's Neihu District. These servers, yet to be shipped, were equipped with NVIDIA GB300 chips (formally named Grace Blackwell Ultra, a strategic AI chip subject to the strictest U.S. export controls to China, Hong Kong, and Macau). The seized servers are valued at around NT$700 million, and over NT$9 million in cash was also confiscated.

Smuggling Chain Uncovered by Drug Investigation

According to prosecutors and investigators, this smuggling chain has actually been operating for three years, with estimated illegal profits reaching NT$10 billion (approximately $300 million USD). The core method involved falsifying KYC documents required by the U.S. Department of Commerce (Know Your Customer, used to verify buyer identity and the final destination of the chips). They falsely declared the final destination or server model to circumvent U.S. export controls on servers equipped with high-end NVIDIA chips.

The operation model, according to reports, involved a U.S. technology company placing the initial order, while Taiwanese accomplices set up shell technology companies to mask the true buyer's identity. They then purchased servers from Supermicro's Taiwanese distributor, Qingyun Technology, and rented space at Chief Telecom's data center to create the illusion that the equipment would remain in Taiwan. After passing customs inspection, the servers were secretly rerouted to China. At least one batch of servers was reportedly shipped via Japan to Hong Kong before finally arriving in mainland China. This deliberate detour, breaking the chain of records in any single country to avoid detection, is commonly known in the industry as "origin laundering."

According to reports from Bloomberg and other foreign media, at least one batch of servers successfully reached the mainland. Taiwan, a global hub for the manufacturing and assembly of the most advanced AI chips, has now become a transit point for chips flowing to China. The fact that this smuggling chain operated undetected for three years highlights a gap between regulation and reality.

Mysterious Chinese Female Financier

The key figure targeted by prosecutors is a Chinese woman using the alias "Dai Fei," approximately 50 years old. She is familiar with cross-strait underground financial flows and import-export operations and is responsible for funding and overall coordination within the smuggling chain.

According to preliminary findings by prosecutors, Dai Fei is "suspected of having a background with the Chinese military and is suspected of being supported by Chinese official forces," making her the central figure in the funding and layout of this smuggling chain.

The person who connected Dai Fei with the Taiwanese side is reported to be Wang Kaiping, referred to as "Wang Nan." He reportedly has ties to the "Yuren Hui" faction of the Bamboo Union gang's Rentang branch and previously served as a director at Dejin Technology. Investigators believe it was Wang Kaiping who facilitated Dai Fei's ability to establish this chip smuggling channel in Taiwan. So far, prosecutors have conducted two rounds of searches and interrogations, and the court has ordered several defendants detained. Preliminary charges include violations of the Anti-Infiltration Act, document forgery, and breach of trust. Additionally, four Supermicro employees in Taiwan are involved, with two detained and two released on bail. The company has suspended these employees.

Legal Loophole Forces Prosecutors to Use Indirect Charges

Notably, Supermicro emphasized in a statement that the company itself is "not a target of this investigation." The four Taiwanese employees involved have been suspended. Over the past few months, the company has actively cooperated with Taiwanese investigators and agreed to searches of the involved employees' equipment. According to foreign media reports, NVIDIA CEO Jensen Huang previously cautioned Supermicro about similar chip resale disputes, urging the company to strengthen compliance operations. Additionally, the American Institute in Taiwan (AIT) has intervened to assist in tracing the identity of the end buyer, resulting in a degree of U.S.-Taiwan collaboration in the investigation.

What is truly noteworthy about this case is that Taiwan currently has no specific law that directly penalizes the act of "selling AI chips to China." Prosecutors can only use indirect charges, filing cases under existing offenses such as document forgery, breach of trust, and the Anti-Infiltration Act. These charges target the commercial violations of falsifying KYC documents and origin laundering, rather than the act of exporting the chips themselves.

The case is still under investigation by prosecutors and falls under the principle of non-disclosure during investigation. All involved parties and implicated companies are presumed innocent until proven guilty by the court. No one should be considered a criminal before a final conviction.

Frequently Asked Questions

Why are NVIDIA's AI chips banned from being sold to China?

The U.S. cites national security reasons to control the export of high-end NVIDIA AI chips to China, Hong Kong, and Macau. Strategic chips like the GB300, which have excessive computing power, are included in the export ban list and require U.S. Department of Commerce approval for export.

Does Taiwan have laws to penalize the smuggling of AI chips?

Taiwan currently has no specific law directly penalizing chip smuggling to China. Prosecutors can only use existing charges such as document forgery, breach of trust, and the Anti-Infiltration Act, targeting the falsification of KYC documents and origin laundering.