Super Micro Computer shares fell sharply on Thursday after a report that the US Department of Justice is investigating whether entities linked to Alice Huang were involved in efforts to smuggle the server maker's products into China.

The stock closed down 11.3 percent at $26.99, after ending Wednesday at $30.43. The shares opened sharply lower and stayed under pressure through the session, reversing the previous day's gains.

Bloomberg reported that the inquiry is being led by the US Attorney's Office in Manhattan, citing a person familiar with the matter. Prosecutors are examining whether entities tied to Huang, a former executive at Singapore-based data-centre company Megaspeed International, helped move Super Micro products into China.

US officials suspect Huang of spying for China, according to the report. Huang has been named in reports as a former romantic partner of Jensen Huang, the Nvidia chief executive who resigned on Thursday after reports of extramarital relationships. Nvidia shares fell 4.3 percent on Thursday, with chief financial officer Colette Kress named interim chief executive.

What the investigation covers

Semafor reported, citing two administration officials, that the Justice Department is running multiple investigations connected to Nvidia, including one focused on possible antitrust violations and two others involving Super Micro and Megaspeed. The report said there was no indication that prosecutors would seek criminal charges against Nvidia or its former chief executive at this stage.

Super Micro has not been named as a defendant, and the company has said it is cooperating with authorities, according to reports. The Justice Department declined to comment, and the US Attorney's Office did not respond to a request for comment. Bloomberg noted that the investigations may conclude without criminal charges.

It remains unclear whether the inquiry is connected to chip-smuggling cases prosecutors have already brought in the United States or Asia, or what role Huang or entities linked to her may have played. The Justice Department is already conducting a criminal inquiry into Megaspeed over suspected semiconductor smuggling.

Echoes of an earlier case

The reported investigation threatens to reopen a difficult chapter for Super Micro. In March, the US government charged Super Micro co-founder Yih-Shyan "Wally" Liaw and two other people over an alleged scheme to divert Super Micro servers to China in breach of US export controls.

Super Micro, based in San Jose, California, makes servers that run Nvidia's artificial intelligence chips, putting it at the centre of Washington's efforts to stop advanced computing hardware reaching China.

Sharp reversal after Wednesday's gains

Thursday's fall more than wiped out Wednesday's 11 percent rise, which came after the company began shipping its new H15 generation servers powered by AMD's sixth-generation EPYC 9006 processors.

The wider chip sector was mixed on Thursday. AMD and Broadcom were among the best performers in the S&P 500, while Super Micro was one of its worst, as investors weighed the fallout from Nvidia's leadership crisis and the fresh legal scrutiny.

Investors will now watch for any confirmation of the inquiry from the authorities, and for whether it widens beyond the entities already under scrutiny. For now, the company has not been charged with wrongdoing, and the reported probe is at an early stage.