Authorities in the United States and Taiwan have brought charges against 11 people in two separate cases for allegedly reselling US-manufactured semiconductor chips to China in violation of export controls, in what the Institute for the Study of War (ISW) describes as a pair of parallel enforcement actions against technology smuggling.
Taiwan case: 10 indicted
Taiwanese prosecutors charged 10 individuals on October 6 with reselling export-controlled semiconductor chips to the People's Republic of China (PRC) between 2017 and at least April 2026. The accused allegedly forged end-user documents and falsely claimed to represent Taiwan's National Chung-Shan Institute of Science and Technology (NCSIST) to buy the chips. Taiwanese authorities said the PRC sought the advanced chips for use in missiles and radar systems.
US case: California man arrested
US authorities arrested Greg Lui, a 38-year-old California resident and owner of Earthmade Computer in the City of Industry, on October 1. Federal prosecutors allege he resold servers containing roughly $300 million worth of export-controlled Nvidia chips — including A100 and H100 graphics processors used to train large AI models — by first exporting them to Singapore and Malaysia and then routing them onward to China without the required US export licences.
Lui has been charged with conspiracy to violate export controls, outbound smuggling and conspiracy to commit money laundering. The indictment describes a transshipment scheme in which false paperwork identified permissible buyers and destinations while the hardware was actually headed to China. US officials say the servers at the centre of the case could be used for "super intelligence" applications that prosecutors allege could strengthen another country's military capabilities.
Why it matters
ISW assesses that China seeks advanced US-designed chips to accelerate domestic AI development and the modernisation of the People's Liberation Army, and notes that US and Taiwanese authorities have recently prosecuted several similar cases involving falsified documents and Southeast Asian routing.
Sources:
- China & Taiwan Update, October 9, 2026 — Institute for the Study of War
- US man arrested over alleged $300 million scheme to smuggle Nvidia AI servers to China — South China Morning Post
Taiwan case: 10 indicted
Taiwanese prosecutors charged 10 individuals on October 6 with reselling export-controlled semiconductor chips to the People's Republic of China (PRC) between 2017 and at least April 2026. The accused allegedly forged end-user documents and falsely claimed to represent Taiwan's National Chung-Shan Institute of Science and Technology (NCSIST) to buy the chips. Taiwanese authorities said the PRC sought the advanced chips for use in missiles and radar systems.
US case: California man arrested
US authorities arrested Greg Lui, a 38-year-old California resident and owner of Earthmade Computer in the City of Industry, on October 1. Federal prosecutors allege he resold servers containing roughly $300 million worth of export-controlled Nvidia chips — including A100 and H100 graphics processors used to train large AI models — by first exporting them to Singapore and Malaysia and then routing them onward to China without the required US export licences.
Lui has been charged with conspiracy to violate export controls, outbound smuggling and conspiracy to commit money laundering. The indictment describes a transshipment scheme in which false paperwork identified permissible buyers and destinations while the hardware was actually headed to China. US officials say the servers at the centre of the case could be used for "super intelligence" applications that prosecutors allege could strengthen another country's military capabilities.
Why it matters
ISW assesses that China seeks advanced US-designed chips to accelerate domestic AI development and the modernisation of the People's Liberation Army, and notes that US and Taiwanese authorities have recently prosecuted several similar cases involving falsified documents and Southeast Asian routing.
Sources:
- China & Taiwan Update, October 9, 2026 — Institute for the Study of War
- US man arrested over alleged $300 million scheme to smuggle Nvidia AI servers to China — South China Morning Post
