Nvidia (NVDA), Super Micro Computer (SMCI), and Dell (DELL) shares plummeted on Monday following Singapore’s announcement of an investigation into whether servers shipped to Malaysia—containing chips prohibited from being exported to China—ultimately made their way to the mainland.
Authorities in Singapore arrested several individuals suspected of being involved in the procurement and shipment of Nvidia chips in violation of U.S. sanctions.
The U.S. has also been investigating whether Chinese AI startup DeepSeek managed to bypass trade restrictions through similar means, as previously reported.
Singapore is requesting additional information from Malaysia and the U.S. to determine the final destination of the Dell and Super Micro Computer servers, Law Minister K. Shanmugam told reporters on Monday. He stated that the buyers had misled suppliers about where the equipment was ultimately being sent.
This investigation could heighten U.S. scrutiny of exports from American tech firms, potentially hindering sales growth. The news also comes as investors exercise caution ahead of the planned implementation of increased U.S. tariffs on goods from China, Mexico, and Canada.
Nvidia stock dropped 8.7% by market close on Monday, while Super Micro shares tumbled 13%, and Dell fell 7%. Intel (INTC) shares also ended the day down 4.2%, reversing earlier gains that had been driven by a report suggesting its struggling chip manufacturing business might benefit from its competitors.
According to Reuters, Nvidia and Broadcom (AVGO) are currently testing chip manufacturing with Intel using its most advanced 18A process, which is designed for cutting-edge chips, including those used in AI. Broadcom, which is set to report earnings on Thursday, saw its stock decline by more than 6%.
Meanwhile, the U.S.-traded shares of leading chip foundry Taiwan Semiconductor Manufacturing Corp. (TSM) (TSMC) fell 4.2%.