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Super Micro Computer (SMCI), a retailer of high-performance servers and liquid-cooled AI racks, is rapidly approaching the proverbial twilight zone as its legal woes mount and major customers start bailing on existing orders.
We reported in early November that NVIDIA had allegedly begun redirecting its orders that were originally placed with Super Micro Computer to other, more stable suppliers. If confirmed, this would constitute a seminal moment as SMCI was, until recently, NVIDIA's third-largest customer.
Now, it seems that Super Micro Computer's major clients are also abandoning it, especially as it remains mired in allegations of financial impropriety, a preliminary DOJ investigation, the exodus of its second auditor in around 18 months, and an imminent de-listing from the Nasdaq exchange.
Super Micro Computer halted construction of a new factory in Malaysia, prompting Malaysia’s YTL Corp. to transfer orders for Nvidia GB200 NVL72 AI servers to Taiwan’s Wiwynn, media report, noting the original order was for a ‘super large’ AI data center. It’s the first…
— Dan Nystedt (@dnystedt) November 11, 2024
To wit, a Taiwanese daily is now reporting that Super Micro Computer recently halted the expansion of its major factory in Malaysia, one that would have doubled its production capacity to 10,000 server cabinets per month.
This expansion halt, however, upended the plans of YTL Group - a major consumer of NVIDIA's AI servers and one of Super Micro Computer's largest customers - to build a green AI data center on the 1,640-acre YTL Data Center Campus in Johor, Malaysia. The facility aims to stitch together one of the largest AI supercomputers in the world by deploying NVIDIA's DGX GB200 NVL72 full cabinet AI servers at scale.
YTL has now reportedly transferred its orders with Super Micro Computer to Taiwan's Wistron Group and its Weiying factory in Malaysia.
This development comes as SMCI's CEO, Charles Liang, recently conceded that the company was "asking NVIDIA every day" for fresh batches of the Blackwell chips but that "not enough new chips" were being delivered.
For the benefit of those who might not be aware, Super Micro Computer's latest travails began in August when Hindenburg Research detailed a litany of malpractices that ranged from distribution channel stuffing and partial shipments to re-hiring top executives responsible for accounting violations that had resulted in a $17.5 million settlement with the SEC. Hindenburg Research also alleged that a material portion of SMCI's sales came from non-arm's-length suppliers such as Ablecom and Compuware. These allegations have also reportedly attracted scrutiny from a preliminary DOJ investigation.
In the aftermath, Super Micro Computer delayed the publication of its annual report, and now stands on the verge of being delisted for violating the Nasdaq exchange's stipulated timeframe for furnishing that report. SMCI now has until the 16th of November to either file the requisite annual report or come up with a plan to regain compliance with Nasdaq's rules.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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