Thu, Jul 05, 2018 - Page 12 News List

Micron chips barred from China

UMC VICTORY:A Chinese court banned the US firm from selling 26 DRAM and NAND-related products, as Chinese chipmakers prepare to ramp up production next year

By Lisa Wang  /  Staff reporter

United Microelectronics Corp (UMC, 聯電) scored the first win in a series of patent infringement lawsuits with Micron Technology Inc, after a Chinese court on Tuesday granted a preliminary injunction blocking the US company from selling its chips in the world’s biggest semiconductor market.

The ruling came amid heightened trade tensions between China and the US, underscoring the technology tussle between the world’s two largest economies.

The Fuzhou Intermediate People’s Court issued a preliminary injunction against Micron’s Chinese units: Micron Semiconductor (Xi’an) Co Ltd (美光半導體西安) and Micron Semiconductor (Shanghai) Co Ltd (美光半導體銷售上海), UMC said in a statement.

Micron, the world’s No. 3 DRAM supplier, is to be prohibited from selling 26 DRAM and NAND-related items — including certain solid-state drives and memory sticks — in China, the court ruled.

“UMC is pleased with today’s [Tuesday’s] decision. UMC invests heavily in its intellectual property and aggressively pursues any company that infringes on UMC’s patents,” UMC copresident Jason Wang (王石) said in the statement.

UMC shares rallied 3.06 percent early yesterday in Taipei trading, but retreated to close flat at NT$18.

Market researcher TrendForce Corp (集邦科技) yesterday said that Micron’s revenue would be harmed by the injunction, as 26 percent of its DRAM output is exported to China.

The ban might prompt a reshuffle in the global memory market next year, as Chinese entrants are to vie for a slice of the pie, it said, adding that China’s Innotron Memory Co (合肥長鑫) and Fujian Jin Hua Integrated Circuit (晉華電子) are set to ramp up DRAM production next year.

“The follow-up to this case is bound to become the focus of the global memory industry, as the US-China trade war enters a critical stage,” TrendForce said in a report.

China is one of the world’s biggest DRAM markets, consuming 20 percent of the global output, TrendForce said.

As the court also ordered Micron to halt operation of a chip assembling and testing plant in Xian, Shaanxi Province, the ruling would have a significant effect on sales of some Micron products, as well as its downstream partners, TrendForce said.

Taiwanese memorychip packager and tester Powertech Technology Inc (力成科技) is Micron’s major partner in operating the plant.

Micron yesterday said it would not comment on the ruling until it receives and reviews documentation from the court.

Chinese customers contributed more than half of the company’s revenue of US$20.32 million last year, Micron’s annual report showed.

The companies began their legal battle in February last year, when Micron filed a lawsuit in Taiwan against UMC and three of its former employees alleging that they illegally replicated Micron’s manufacturing techniques to profit UMC businesses in China.

In September last year, a Taichung District Court judge indicted UMC and its former employees for theft and use of trade secrets from Micron’s local units, to which UMC in January responded with a countersuit alleging that Micron illegally used its patents related to memory applications in DDR4 DRAM chips, solid-state drives and memory chips used in graphic cards.

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