Published: Sat, July 07, 2018
Business | By Kate Woods

UMC secures injunction against Micron chips in China

UMC secures injunction against Micron chips in China

Micron issued a statement saying, "Micron has not been served with the preliminary injunction referred to in the statements issued by United Microelectronics Corporation (UMC) and Fujian Jinhua Integrated Circuit Co".

The firm's estimate that the ban imposed by a Chinese court in a patent infringement lawsuit would weaken quarterly revenue by just 1 percent drove its shares as much as 3.6 percent higher and lifted stocks of other USA chipmakers.

A spokesman for Micron, which is based in Idaho, said Wednesday that the company hasn't yet received the court order and won't comment until it does. Last December, Micron filed a lawsuit against UMC in the Northern District Court of California of the United States, claiming that UMC violated intellectual property rights by copying its memory patents and trade secrets.

UMC has not commented on the poaching allegations.

UMC's complaint followed a lawsuit issued by Micron against it in the USA previous year.

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The lawsuits covered three areas, specific memory applications related to DDR4, SSD and memory used in graphics cards.

The ruling, which hit shares of Idaho-based Micron and other U.S. chipmakers on Tuesday, comes amid an escalating trade spat between Washington and Beijing over tariffs.

The dispute follows a ban on US firms supplying parts to China's telecom equipment maker ZTE as well as the drawn-out wait for Chinese regulators to approve Qualcomm Inc's $44 billion takeover of NXP Semiconductors.

The civil lawsuit filed by Micron against UMC and Jinhua in California is consistent with Micron's commitment to aggressively protect and enforce its trade secrets and intellectual property worldwide.

Much of Taiwanese semiconductor firms' business is conducted with the mainland. However, that may not be good news to Korean semiconductor companies. "I think there is room for the stock to continue to go higher". "And the stakes are high, as we can see in this case".

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China is the largest market that accounts for 65% of world semiconductor trade. However, the Chinese court did not informed Micron of the decision to prohibit production and sale of by Micron, but the story was leaked from UMC, a competitor of Micron. In 2017, Micron generated about half of its $20.3 billion fiscal revenue from China.

It also resells flash memory products purchased from other suppliers. "So they have to import anyway", Greg Roh, an analyst at Hyundai Motor Securities, told Reuters in an interview. The ban applies to its subsidiaries Micron Semiconductor (Xi'an) Co Ltd and Micron Semiconductor (Shanghai) Co Ltd. "The Fuzhou Court issued this preliminary ruling before allowing Micron an opportunity to present its defense", said Joel Poppen, senior vice president, legal affairs, general counsel and corporate secretary at Micron Technology.

However, today Micron reiterated its quarterly sales guidance, emphasizing that the injunction would only impact its overall sales by 1%.

The delay in approving the deal has coincided with uncertainty over the fate of Chinese smartphone and telecommunications company ZTE.

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