AI Chip Smuggling: Taiwan Indicts Nine Over B300s

Prosecutors say 74 of 130 B300 servers reached China

Prosecutors say 74 of the 130 B300 servers approved for sale reached China, and customs stopped the other 56. The release calls all of them B300 servers and gives no hardware specification. The sale was split into three delivery stages of 2, 64 and 64 units.

The release is dated 24 August 2026. It matters to vendors, distributors and data center customers because it sets out which of a seller's own checks the defendants allegedly beat.

Shipments as described by prosecutors

Shipment	Units	Route
20 January 2026	16	Direct to China
30 January 2026	26	Indonesia, then China
2 and 12 February 2026	24	Indonesia, then China
Stage 3, Hong Kong leg on 11 April 2026	8	Japan, then Hong Kong, then China
Stage 3, never shipped	56	Held back at customs

The four shipped legs add up to 74 units, and the blocked 56 bring the total back to the 130 approved. The release does not say when the 8 units left Taiwan for Japan; 11 April 2026 is the date it gives for the Hong Kong leg.

How insiders allegedly beat the whitelist and site audit

Prosecutors allege that insiders defeated each control on the sale in turn, from the whitelist review to the on-site check. The controls were set by a US company that designs GPUs (the vendor) and by its US partner that builds those GPUs into AI servers (the integrator).

A buyer had to be on the vendor's whitelist, an approved-buyer list, and file end-use and end-user declarations. Resale was banned, and orders of 8 or more units also needed an on-site inspection by sales and technical staff. The release says the buyer was put on the whitelist by means it does not specify.

From July 2025, prosecutors say, the buyer's operators and three other defendants agreed on three tasks. A sales director at the integrator's Taiwan subsidiary would explain the sales review so the buyer could prepare its papers in advance. The general manager of a distributor would front the money to dodge a review of where the buyer's funds came from, and a data center project manager would make the leased server room look operational.

On 8 September 2025 the buyer's general manager completed the integrator's declaration. It named the buyer as the end user and Taiwan as the installation country and promised no export to US-sanctioned parties; prosecutors say all three statements were false. The site inspection followed two days later, on 10 September 2025.

According to the release, the defendants at the inspection knew that the leased rack space, power and network bandwidth could not support 130 servers, and hid this from the visiting staff. The staff misjudged the site, and a vendor employee then emailed managers that the check was done. The false declarations were filed again in December 2025 and after 26 February 2026, which released stages 2 and 3.

Why customs stopped the last 56 servers

Customs was the check that stopped the stage 3 shipment: its staff noticed something was wrong and required an export license before it could leave. The Customs Administration under Taiwan's Ministry of Finance asked for a strategic high-tech commodities export license from the International Trade Administration. The 56 units were being exported to a Japanese company in the buyer's name at that point.

Prosecutors say the customs broker, the buyer's general manager and the owner of a trading company then agreed that the broker would fabricate a web page for the application. On 15 April 2026 the buyer filed a license application with false content, attaching a web page pieced together from the integrator's own site. The case was uncovered before the license was issued, so the 56 units never left.

A Keelung prosecutor, Hsiao Yung-li, found the exports while directing a Coast Guard Administration team on another case. Investigators then ran 3 searches and detained 7 defendants, including Zhang. Defendant He later turned himself in, and the release says this revealed the whole picture.

Investigators seized more than US$457,000 and proceeds of crime of more than NT$39.32 million. The release gives both as rounded amounts without exact figures.

Charges and sentences sought against the nine defendants

Nine defendants are indicted, eight on the export offenses and three on a separate asset-stripping count, and no court has convicted any of them. Eight face breach of trust and forgery of documents under Taiwan's criminal code over the exports, and the ninth, He, is not on that count. Three face aggravated breach of trust under the Securities and Exchange Act, over the alleged asset-stripping of a listed distributor, and two of those three are among the eight.

Prosecutors' requests differ by role. For the export count they ask for the statutory maximum against Zhang, Lin, Wang and W, and for 1 year 6 months against the customs broker. For Lin they ask for 6 years on the separate asset-stripping count, the heaviest request in the release.

They ask for 3 years each for Cai and for a defendant the sentencing line names as Chen. Elsewhere the release describes Chen as wanted in a separate case, so the line leaves unclear who is meant.

Defendants He and Lü confessed in full and cooperated, and prosecutors recommend leniency for them. All of these figures are requests to the court, and no court has ruled on any charge.

Where the money went: US$21.2 million in alleged gains

Prosecutors put the alleged gain from reselling the 74 servers at US$21,205,531, and they ask the court to forfeit it. The figure is what remained after paying the distributor for the goods, and none of it has been seized. The release attributes it to the two people who ran the buyer company.

Two sales directors at the integrator's Taiwan subsidiary, Lin and Wang, received bonuses of US$62,804 and US$83,872 for completing the order. The distributor's general manager, Lü, expected a bonus of NT$6,000,668 and received NT$164,600, and forfeiture is sought for the bonuses they received.

The separate asset-stripping count rests on four invoices issued between January and April 2026 for installation, wiring and configuration work that defendant He's electronics company never did. The distributor remitted NT$39,158,514 in total between January and May 2026. Lin, Lü and He collected and split NT$21,998,514 of it, and NT$17,160,000 had not yet been withdrawn.

The release also lists the harm to the integrator: reputational damage, a fall in its share price, exports placed on a mandatory inspection list, delayed deliveries and penalties owed to customers. The release puts no figure on that damage.

Why the release masks the company names

The release masks both company names, so they are referred to here only by role. It describes a US company that designs and sells GPUs and a US partner that builds those GPUs into AI servers, with a circle mark in place of a character in each name, and it does not say why.

Some news coverage names both companies, but that is a different source with a different standard of proof. The release contains no statement from any defendant, lawyer or company, so the only account in it is the prosecutors'. Nothing in that account has been proven in court.