Micron Chip Sales Banned In China

Micron temporarily banned in China

Micron Stock Drops On China Court Ruling To Ban Its Memory Chips

If the judgment is enforced in the future, Micron will be prohibited from selling some of its memory products in China. That came a month after the USA company filed a lawsuit in California alleging Jinhua and UMC stole Micron's trade secrets at its Taiwan plant.

As evidence, Micron cited the use of Micron DRAM technology code names at a UMC and Jinhua recruitment fair for RAM chip experts in Silicon Valley in October 2016 and its discovery that its employees poached by UMC had copied confidential information before leaving the company.

Micron is now saying that they have not been served with a preliminary injunction in China on some of their chips as reported by Micron rival UMC.

UMC co-president Jason Wang, commented, "UMC is pleased with today's decision".

Last December, Micron filed a lawsuit against UMC in the Northern District Court of California of the U.S., claiming that UMC violated intellectual property rights by copying its memory patents and trade secrets. We strongly believe that the patents are invalid and that Micron's products do not infringe the patents.

Only this week, the company said it was planning to list its HeJian Technology Corp., its China operations, on the Shanghai Stock Exchange.

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"The central government of China has often stated that the rights of foreign companies are fairly and equally protected in China", Micron said in the statement.

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. In 2017, Micron generated about half of its $20.3 billion fiscal revenue from China. UMC shares jumped more than 3% in morning trading in Taiwan on Wednesday but ended the day flat.

Other chipmakers also gained.

"This is an opportunity for SK Hynix (000660.KS) and Samsung (005930.KS), because the banned products are not what the Chinese can make on their own".

Under the Chinese yuan-denominated A share listing plan announced last week, wafer foundry Hejian will merge with two of its own units - contract chipmaker United Semiconductor (Xiamen) Co. and integrated circuit designer UnitedDS Semiconductor (Shandong) Co. - to issue 400 million new shares. "In the end, the Chinese court is expected to withdraw the preliminary ruling, but if Chinese chipmakers have technological power that can match that of Korean chipmakers several years from now, there will be a stronger pressure or sanction on Korean companies". But it also said that restrictions will only hurt its business slightly. The country is the world's largest market for chips but China's homegrown suppliers are dwarfed by American rivals.

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