Sales of Micron Chips Blocked in China Amid Trade Tensions with US

07 July, 2018, 02:29 | Author: Eric Barnett
  • Micron Stock Drops On China Court Ruling To Ban Its Memory Chips

This time, though, it's in court for a different reason: It has accused USA rival Micron of infringing its patents on memory technology, and has been granted an early win in the form of a temporary injunction against the company.

Last year, Micron filed suit again UMC, alleging that UMC stole memory technology from the company and transferred it to Jinhua Integrated Circuit Co., a DRAM maker in China.

Details of the ban were widely reported from Chinese sources on Tuesday and Wednesday. "UMC invests heavily in its intellectual property and aggressively pursues any company that infringes UMC's patents".

However, sources close to the company say it is now drafting a response to the ruling by the Fuzhou Intermediate People's Court of the People's Republic of China.

China has been trying to build its own semiconductor industry as part of its "Made in China 2025" strategy and lower dependency on foreign companies.

"It certainly appears semiconductors could move to the prime-time in negotiations between the Trump Administration and China", Evercore ISI analyst C.J. Muse said.


Other semiconductor shares suffered as well on the news as the battle between Micron and China is considered a bellwether amidst a trade fight between Beijing and Washington, and China's attempt to gain advanced chip tech and knowledge. The Chinese government has poured billions of dollars into shifting the balance of power. "Near-term this could favor non-US chipmakers vs". In January, UMC filed a patent infringement lawsuit against Micron in China.

The ruling follows a recent raft of investigations by Chinese regulators into Micron and its South Korean rivals, SK Hynix and Samsung Electronics, on the grounds that the companies may be colluding to keep memory prices high. The company - which only two years ago was losing money, eliminating jobs and weighing an acquisition offer from China's Tsinghua Unigroup - almost doubled its year-over-year profit last quarter, to $3.82 billion.

UMC, a foundry that does not make mainstream memory products, has not commented on the poaching allegations and the case is still being heard.

UMC also requested the court to order potential defendants to stop manufacturing, processing, importing, and selling the allegedly infringing products.

Shares of Micron, which fell 5.5 percent on Tuesday after the ban, was up 1.9 percent at $52.46 in afternoon trading on Thursday.

It also resells flash memory products purchased from other suppliers. Qualcomm Inc rose 3.2 percent, Broadcom Inc 2 percent and Intel Corp up 2.6 percent.

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