Singaporean police arrested three men on Thursday for allegedly smuggling Nvidia chips amid increasing scrutiny regarding China’s acquisition of advanced semiconductors. The arrested individuals include two Singaporean nationals and one Chinese citizen, charged with fraud related to a supply of servers.
Singapore arrests three for allegedly smuggling Nvidia chips
The Singapore government is currently investigating whether servers manufactured by Dell and Supermicro contained restricted Nvidia chips that were diverted from their intended destination in Malaysia, according to Bloomberg. Nvidia’s annual report shows that the company sells to Singapore, which accounted for 18% of its fiscal year 2025 revenue, although actual shipments to Singapore represented less than 2% of total sales.
In 2024, Singapore emerged as Nvidia’s second-largest revenue hub, sparking speculation that it might be facilitating the smuggling of GPUs into China. Nvidia has denied these claims, clarifying that billing locations do not necessarily indicate the final destination of GPUs and confirming that shipments to Singapore were minimal in terms of volume for fiscal year 2025. The U.S. Commerce Department’s scrutiny intensified after DeepSeek, an AI startup, unveiled its open-source AI model and chatbot, raising concerns over its potential access to banned chips.
A report by Channel News Asia suggested the existence of a smuggling network, with Singapore-based intermediaries allegedly funneling high-performance Nvidia GPUs into China in violation of U.S. export regulations. The investigation into these operations is ongoing and aims to assess the full scale of the illicit activity. DeepSeek reportedly relies on tens of thousands of Nvidia Hopper GPUs, such as models H100, H20, and H800, while smaller research entities may utilize fewer units.
Last week, the Singapore government stated it is not obligated to enforce unilateral foreign export limits but expects companies to comply with relevant regulations. Officials emphasized that exploiting the country’s trade system to bypass global restrictions will not be tolerated.
The arrests in Singapore follow a U.S. announcement a month prior regarding an investigation into potential collaboration between DeepSeek and Singaporean partners to acquire Nvidia chips. Nvidia clarified its role, stating, “We use Singapore as a hub for centralized invoicing, but our products are typically shipped elsewhere.”
Singaporean authorities are now seeking additional information from Malaysia and the U.S. to ascertain the final destination of the Dell and Supermicro servers, as the purchasers reportedly misled suppliers regarding the equipment’s ultimate endpoint, according to Law Minister K. Shanmugam.
This investigation raises the possibility of increasing U.S. scrutiny on equipment exports from American companies, which could impact sales growth. The development occurs as investors express caution ahead of the planned implementation of higher U.S. tariffs on goods from China, Mexico, and Canada.
In the wake of the arrests, Nvidia’s stock experienced an 8.7% decline on Monday, while Super Micro shares dropped 13%, and Dell fell by 7%. Intel’s stock closed down 4.2%, reversing a prior gain attributed to a report about potential improvement in its chip manufacturing business. Shares of Broadcom fell over 6% ahead of its earnings report, while Taiwan Semiconductor Manufacturing Corp. (TSMC) saw a 4.2% decline in its U.S.-traded shares.
Featured image credit: Mariia Shalabaieva/Unsplash
