Key Nvidia and Intel supplier raided over alleged China origin fraud — Unimicron faces probe over PCB origin washing, risk of 40% U.S. tariff penalty

Taiwanese prosecutors are investigating Unimicron, one of the world’s largest PCB and chip substrate makers and a key supplier to Nvidia, Intel, Google, and Amazon, over allegations that it shipped China-made PCBs back to Taiwan and relabeled them as Taiwanese products, according to Nikkei Asia. Investigators raided the company’s headquarters in Taoyuan’s Guishan District and a manufacturing plant in Zhongli District on August 28, questioning 14 employees as suspects — including the general and deputy general managers of its PCB business — and four more people as witnesses.

Prosecutors say that the alleged conduct contravened Articles 216, 210, and 255 of Taiwan’s Criminal Code, which cover the use of forged private documents and false labeling of an item’s origin. Wang, the person identified as the PCB department general manager, was released on bail of NT$15 million (roughly $473,000), while a deputy general manager identified as Wu was released on NT$12 million (roughly $378,000).

Three others are said to have posted bail ranging from NT$300,000 to NT$5 million, and the remaining nine were released without bail. “There was strong suspicion that they had violated Taiwan’s law covering the use of forged private documents and false labeling of goods,” the Taoyuan District Prosecutors Office said in a statement. Unimicron told the Taiwan stock exchange that it’s fully cooperating with the investigation and that it doesn’t expect a material impact on its operations.

Since August last year, U.S. Customs and Border Protection has applied an additional 40% tariff on goods that it determines were transshipped through third countries to evade duties, on top of any other applicable penalties, and the agency has no authority to waive or otherwise mitigate the charge. If any relabeled Unimicron PCBs were to reach the U.S., that penalty would fall on the company’s American customers as importers of record.

The White House has identified 40 countries and territories that it says pose an elevated risk of illegal transshipment, with Taiwan flagged as a key concern. Taipei has been running major crackdowns on “origin washing,” where companies claim goods are made in Taiwan to obtain preferential tariff treatment, a crackdown that’s perhaps perfectly illustrated by the fact that prosecutors published names and bail amounts within 24 hours of raiding one of the country’s most important listed tech companies. After all, the “Made in Taiwan” label is ultimately a trade asset whose value rests on the fact that it’s not “Made in China.” Since its elevated risk designation, Taiwan is understandably keen to show Washington that it polices the difference itself rather than leaving it to U.S. Customs.

The products involved in this crackdown appear to be conventional PCBs, not the high-end ABF substrates used for Intel’s EMIB-T platform or Nvidia’s advanced data center accelerators. Unimicron’s offshore manufacturing remains in China for standard substrates, PCBs, HDI, and flexible boards, while its advanced CoWoS-related substrate capacity is based at its Yangmei factory in Taoyuan.

If the case concerns relabeling on individual products, the fallout will be limited to the Taiwanese prosecution. If, however, it turns out that China-made goods were transshipped through Taiwan to alter their origin before export to the U.S., that’s an entirely different story and could trigger CBP’s 40% transshipment penalty on the affected goods, along with potential retroactive duty reassessments, which would hit Unimicron’s American customers as importers of record.