Micron Technology, Inc. (MU) Loses China Case, Memory Chip Sales Blocked

Semiconductors are among China's biggest imports rivalling oil

Taiwan's United Microelectronics Corporations won its patent case brought against Micron Technology based in Idaho, in a court in China. Washington says the measures are a response to intellectual property theft by China.

Micron claimed ignorance about the ruling, saying it had not seen any paperwork from the Chinese court. 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.

China's aim may not be to bar shipments of Micron's chips, instead the ruling may be part of a strategy to push it into a partnership with Chinese semiconductor makers, which could speed up the country's internal chip industry development, according to Stifel Nicolaus analyst Kevin Cassidy.

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

Micron said it had not been served with the injunction and would not comment further until it had reviewed documentation from the Chinese court.

Last December, Micron filed a lawsuit against UMC in the Northern District Court of California of the USA, claiming that UMC violated intellectual property rights by copying its memory patents and trade secrets. "The Fuzhou Court issued this preliminary ruling before allowing Micron an opportunity to present its defense", Micron's Joel Poppen, senior vice president of legal affairs and general counsel, said in a release. China buys far more chips than any other country, and about 90% came from foreign companies a year ago, according to technology consultancy International Business Strategies.

(Jinhua). The patent infringement claims of UMC and Jinhua were filed against Micron in retaliation for criminal indictments filed by Taiwan authorities against UMC and three of its employees and a civil lawsuit filed by Micron against UMC and Jinhua in the United States District Court for the Northern District of California for the misappropriation of Micron trade secrets.

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

Micron and UMC have been at loggerheads over the issue of stealing trade secrets in the Chinese court since past year.

China is the largest importer of memory products, consuming 20 percent of the world's DRAM.

As of 11:42 a.m., shares of UMC had gained 0.56 percent to NT$18.05 (US$0.58), with 81.87 million shares changing hands, outperforming the broader market index, which was down 0.12 percent at 10,702.91. "So they have to import anyway", said Greg Roh, an analyst at Hyundai Motor Securities.

A Chinese antitrust regulator is already investigating Micron and its Korean rivals, the companies have said.

Micron shares closed down 5.5 per cent at $51.48, while Nvidia finished 2 per cent lower.

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