China court 'bans sales' of chips from US firm Micron

Andrew Cummings
July 7, 2018

Taiwan's United Microelectronics Corporations won its patent case brought against Micron Technology based in Idaho, in a court in China.

The sales ban ratchets up trade tensions between Washington and China over wide ranging issues including intellectual property, autos and soybeans.

To counter the lawsuit, UMC sued Micron in China in January 2018, accusing the American company of stealing its patents registered in China.

A Chinese court has temporarily halted a US memory chip maker from selling its semiconductor products in China, a move that could further intensify the ongoing trade dispute between Beijing and Washington.

Micron is the world's fourth-biggest semiconductor supplier by sales revenue following South Korean firms Samsung and SK Hynix and USA chip giant Intel.

Micron said that it hasn't been issued with an injunction from the Chinese court and would not be commenting further until it has received and reviewed the relevant documents.

China represents about one quarter of the worldwide sales of memory chips, while half of the revenue generated by Micron is from sales in China, with an additional 12.5% from sales of chips in Taiwan.

The ruling is expected to help UMC build a good record that will help it secure regulatory approval from China to publicly list a subsidiary on the Shanghai Stock Exchange, dealers said.

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 declined to provide a copy of the court's decision. Joel Poppen, Micron's general counsel, added that it "will continue to aggressively defend against these unfounded patent infringement claims while continuing to work closely with its customers and partners". The patents are not used in Micron's DRAM and NAND technology or products, and UMC and Jinhua rely on distorted interpretations of the patents and improper evidence to support their false allegations that Micron infringes the patents.

US analysts who have been recommending Micron's stock as it racks up record profits amid one of the strongest periods of demand in the memory chip industry's 50-year history, expressed relief at Micron's analysis.

Analysts said the ruling would bolster Micron's well-established rivals. "This is an opportunity for SK Hynix and Samsung, because the banned products are not what the Chinese can make on their own. So they have to import anyway", said Greg Roh, an analyst at Hyundai Motor Securities.

Nevertheless, MU share are trading down -5.34% (down -$2.91).

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