NVIDIA Partner Super Micro Ends $50 Million Loan, Shares Fall

Super Micro Computer Inc. (SMCI, Financials) ended a $50 million loan deal with HSBC’s Taiwan unit, therefore creating even another level of financial difficulties for its operations. The business said that formally the loan, completely repaid on Sept. 9, was ended on Dec. 20. Reflecting investor uncertainty, Super Micro’s shares fell 5% on the announcement.

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Previously called the General Loan, Export/Import Financing, Overdraft Facilities, and Securities deal, the terminated deal provided credit to Super Micro’s Taiwan affiliate. The company’s future liquidity management comes under scrutiny as it has not stated intentions for a successor financing strategy.

Amid these developments, Super Micro Computer keeps working with NVIDIA Corp. (NVDA, Financials) to improve its position in the artificial intelligence sector while handling continuous financial review. Emphasizing its dedication to improving artificial intelligence technology, the business has revealed three NVIDIA-powered generative AI SuperClusters, aiming at corporate and big language model applications.

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Announced earlier this year, the SuperClusters seek to clear key AI process bottlenecks like GPU memory capacity and efficiency. The development emphasizes Super Micro’s strategic dependence on NVIDIA technology to support its AI offers, a move experts see as essential to maintain its competitiveness in the fast changing tech scene.

Super Micro struggles financially, however. The firm postponed publishing its annual report in August, under investigation by short-seller Hindenburg Research for claimed possible accounting mistakes. October saw an escalation in the matter as Ernst & Young left their post as auditor due to internal control issues. Super Micro hired BDO USA as its new auditor to handle these issues and submitted a compliance plan to Nasdaq, which gave the business an extension until February 2025 to record missing reports.

This article first appeared on GuruFocus.