# Super Micro Faces $2.5B Server Scheme Guilty Plea as Backlog Tops $60B

- URL: https://stocks.freetheai.org/news/super-micro-faces-2-5b-server-scheme-guilty-plea-as-backlog-tops-60b-935996
- Published: 2026-10-12T11:00:00Z
- Category: company_news; sentiment: mixed; impact: high
- Symbols: [NASDAQ:SMCI](https://stocks.freetheai.org/symbols/NASDAQ-SMCI)
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Super Micro Computer, Inc. (SMCI) contractor Ting-Wei Sun pleaded guilty to criminal charges involving a scheme that illegally redirected approximately $2.5 billion of American artificial intelligence servers, including systems equipped with Nvidia chips, to China. Meanwhile, board member Judy Lin retired from her position on October 9, 2026, after serving on the board since 2022.

Despite the legal developments, strong demand for hardware from cloud providers and hyperscale customers pushed the company's order backlog beyond $60 billion, stretching projections into 2027. However, rapid growth has created operational pressure. Inventory jumped 175% year over year to $12.89 billion, tying up additional working capital. Profitability is also taking a hit as high-volume graphics processing unit systems carry lower margins. After reporting a fiscal fourth-quarter non-GAAP gross margin of 17.6%, management expects the first-quarter margin to narrow to between 10.4% and 10.8%.

Investors will track how quickly the company converts its record backlog into revenue during fiscal first-quarter 2027, where sales are projected at $14.5 billion to $15.5 billion. Markets will also monitor whether profit margins stabilize as AI systems expand to represent more than 80% of total revenue. Shares of Super Micro Computer, Inc. fell 2.14% today to $41.85.

## Key points

- Super Micro contractor Ting-Wei Sun pleaded guilty to charges related to diverting roughly $2.5 billion in U.S. AI servers to China.
- Demand from cloud and hyperscale clients pushed Super Micro's order backlog past $60 billion extending into 2027.
- Inventory expanded 175% year over year to $12.89 billion, tying up substantial working capital on the balance sheet.
- Fiscal Q1 2027 sales guidance is set at $14.5 billion to $15.5 billion, with non-GAAP gross margins projected at 10.4% to 10.8%.
- Director Judy Lin retired from the board of directors effective October 9, 2026.

## Questions and answers

### Why did a Super Micro Computer contractor plead guilty?

Contractor Ting-Wei Sun pleaded guilty to charges connected to a scheme that diverted approximately $2.5 billion in American AI servers, including Nvidia-chip systems, to China.

### What is Super Micro's sales guidance for fiscal Q1 2027?

Super Micro Computer expects fiscal first-quarter 2027 sales to reach between $14.5 billion and $15.5 billion, with AI systems anticipated to account for over 80% of total revenue.