NVIDIA manager allegedly “leaked” chips to help smugglers; detained: B300 resold to China for 3x profit, but the prison sentence is only 5 years

NVIDIA senior business development manager Zhang Denglong was accused of deliberately issuing consent forms when verifying customers’ purchase eligibility, to help AI servers equipped with B300 chips and banned from being sold to China pass approval by disguising non-compliant orders. On July 24, he was detained and had his motion for continued detention without appearance approved by the Keelung District Prosecutors’ Office after directing the Investigation Bureau and search teams from the Taipei office to search his residence and company and question him. He became the 7th defendant in this case.
(Background: Taiwanese suspects allegedly smuggling Nvidia AI chips into China! Bloomberg: used “Japan as a springboard” to smuggle high-end Supermicro servers)
(Additional context: Progress on the AI Nvidia chip smuggling case — mysterious female Chinese benefactor appears; a drug search unexpectedly uncovers the operation)

Table of contents

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• Letting it through: one consent form replaces all reviews
• Three-stage method: placing orders with front people, fake data centers, then true resale
• Three waves of searches—an evidence timeline reveals a hundred-billion case
• The gap between price differences and sentencing

NVIDIA senior business development manager Zhang Denglong was searched at his residence and company and questioned by the Investigation Bureau teams coordinated by the Keelung District Prosecutors’ Office on July 24. After the questioning, the prosecutors determined his alleged wrongdoing was serious, with risks of flight, destroying evidence, and collusion, and arrested him on the spot and sought continued detention without appearance, which was approved by the court.

Letting it through: one consent form replaces all reviews

Investigators found that Zhang Denglong knew that Supermicro assembled AI servers equipped with NVIDIA B300 chips were prohibited from being sold to China, yet when checking customers’ purchase eligibility, he deliberately issued consent forms to allow non-compliant orders to pass verification by the relevant government review unit.

This consent form is the most critical gate in the entire smuggling chain; all the later disguises were built on this “letting it through” step.

Three-stage method: ordering with front people, fake data centers, true resale

An exclusive investigation by Mirror Weekly reveals the co-conspirator structure shows the smuggling operation was carried out in three steps:

First, order AI servers equipped with B300 chips from Supermicro through front companies

Second, rent data center facilities from a data center provider Fangdian Communications to create the appearance that the devices would remain in Taiwan for use

Third, after passing inspection and clearance, export under a declaration-for-export by customs, send them from Keelung Port to Japan, then transship to Hong Kong, and ultimately flow into mainland China; throughout the entire process, false documentation was used for export declarations, involving the crime of forging documents.

Three waves of searches—an evidence timeline reveals a hundred-billion case

The actions by the Keelung District Prosecutors’ Office and a special task force under the Coast Guard Administration were advanced in three waves.

On May 20, the first operation: intercepted more than 50 AI servers worth 700M yuan. Three people including Mr. You were detained and their requests for continued detention without appearance were approved.

On June 29, the second action: searched Supermicro’s Taiwan branch, Qingyun Technology, and Fangdian Communications; another three people were detained and had motions for continued detention without appearance approved.

On July 24, the third wave targeted Zhang Denglong inside NVIDIA; the total number of detained suspects reached 7.

Those known to be involved include Wang Xiangyi, business manager of Supermicro’s Taiwan branch; Lü Yangkai, general manager of Qingyun Technology; and Zhang Ruicang, business manager for Supermicro’s Taiwan region, who, after being indicted by the U.S., has been missing. The co-conspirator structure spans official Chinese capital, people inside NVIDIA, Taiwanese gangs, and fraud and money-laundering operators, forming a fully compartmentalized industry chain.

The gap between price differences and sentencing

The investigation by Mirror Weekly reveals differences in sentencing and profit that can explain why the case persisted for 3 years without stopping: a single server’s original price was about 13 million yuan; after being smuggled into China and resold, it fetched nearly 40 million yuan—an over 3x price spread.

In terms of sentencing, in Taiwan the heaviest punishment for smuggling drugs can be the death penalty, but the worst penalty for illegally selling controlled chips is at most 5 years’ imprisonment for breach of trust or forgery of documents. With three times the payoff versus a five-year cap, the math is not hard; the investigation also pointed out that Taiwanese gangs have already shifted from selling drugs to smuggling chips for a plainly stated reason: higher rewards and lower risk. The marginal deterrent effect of controls had already failed in the face of this calculation.

The Coast Guard Administration was originally actually investigating a drug-selling case. While the special task force was monitoring suspects’ conversations during the investigation, they repeatedly heard terms like “B300” and “received.” They initially thought these were codes for a new type of drug. They kept surveillance and evidence gathering but never saw any drug transactions.

After noticing something was wrong and further investigating, they confirmed these code words referred to NVIDIA’s high-end chips, with specifications even one tier higher than the previously seized B200 in the United States. The prosecutors and the Coast Guard Administration then cooperated with the U.S. side to review shipment records, and unexpectedly cracked the chip smuggling case.