Taiwanese prosecutors have detained an Nvidia employee and searched the chipmaker's Taipei office, the first time the island's criminal investigation into the diversion of restricted AI hardware to China has reached inside the company whose processors sit at the center of it.

The Keelung District Prosecutors Office said Tuesday it had detained a man surnamed Chang on suspicion of falsifying business documents under the Criminal Code, after investigators searched his home and his workplace on July 24. Prosecutors said Chang is "strongly suspected of having committed the offences, and that there is a risk of flight, destruction of evidence, and collusion with accomplices or witnesses." A court granted the detention request.

The statement did not name Nvidia. Bloomberg first reported that Chang works for the company and that the search covered his desk at Nvidia's Taipei office, and Bloomberg's sources said the detention also involves an allegation of breach of trust. Prosecutors have not accused Nvidia of any wrongdoing.

Seven people are now being held in the case, including two from Super Micro Computer and one from Taiwan-listed Albatron Technology. Chang is the first known Nvidia employee to face detention in a chip diversion case anywhere.

The investigation opened in May, when Taiwanese officials said they were examining the shipment of high-end AI servers built by Super Micro and containing restricted Nvidia chips to China, Hong Kong and Macau in violation of US export controls. Those held are accused of forging documents to move roughly 50 Super Micro servers. Some cleared Taiwanese customs and were routed to China through Japan, an official previously told AFP.

Taiwanese media have described Chang as a senior business-development manager and reported that prosecutors are examining end-user and know-your-customer documentation he is alleged to have signed off on - the paperwork layer that export compliance depends on. Prosecutors have released no further detail on his role or the evidence.

Nvidia, whose chips power most of the world's advanced AI systems, said it sells primarily to established partners and original equipment manufacturers that help ensure compliance with US export rules. "Smuggling is a nonstarter," a spokesperson said. "Even relatively small exporters and shipments are subject to thorough review and scrutiny on both sides of the globe, and any diverted products would have no service, support, or updates."

The American Case

Taiwan's investigation runs alongside a far larger US enforcement action. In March, the Justice Department unsealed charges against Super Micro co-founder and board member Yih-Shyan "Wally" Liaw, Taiwan sales manager Ruei-Tsang "Steven" Chang and contractor Ting-Wei "Willy" Sun, alleging a conspiracy to divert roughly $2.5 billion in Super Micro servers carrying restricted Nvidia GPUs - including H200 and B200 parts - to China between 2024 and 2025 without Commerce Department licenses.

Liaw's trial is set for November 2. He faces up to 20 years on the lead conspiracy count. Chang has been described in earlier reporting as a fugitive. Super Micro was not charged, has said it is cooperating, and placed the implicated employees on leave. Taiwanese prosecutors have said it is too early to tell whether their case connects to the American one.

The Gap Prosecutors Are Working Around

Taiwan manufactures the world's most advanced semiconductors and assembles them into the servers at issue. It has no statute that directly criminalizes exporting AI chips to China.

That is why the charges in Keelung are forgery and false business records rather than anything touching the diversion itself. A proposed amendment to Taiwan's Foreign Trade Act, adding what has been described as a mainland China semiconductor clause, would let prosecutors charge the export directly. It has not passed. The Ministry of Economic Affairs has confirmed consultations with Washington on adopting performance-threshold controls modeled on the US framework, without committing to a timeline.

Seven weeks into the case, prosecutors are still building it out of the general Criminal Code.

Washington has restricted sales of Nvidia's most capable accelerators to China since 2022, on the argument that hardware that trains commercial models also trains military and surveillance ones. Blackwell-class parts remain under a presumption of denial, meaning license applications are effectively refused. The H200 was moved to case-by-case review in January.

Chinese demand has not moved with the policy. Older-generation parts command steep premiums on the gray market, and diversion reports have circulated for years. The servers in the Taiwan case are worth a fraction of the American one, which is roughly the point: the hardware is scarce enough that even small volumes are worth forging paperwork over.