US Justice Department charges Chinese company with trade secrets theft

Attorney General Jeff Sessions speaks during a news conference to announce a criminal law enforcement action involving China at the Department of Justice in Washington Thursday Nov. 1 2018

Attorney General Jeff Sessions announced criminal charges and an operation to thwart Chinese economic espionage. | AP

The charges against Taiwan-based United Microelectronics Corp, China state-owned Fujian Jinhua Integrated Circuit, Co, Ltd and three individuals mark the fourth case brought by the Justice Department since September as part of a broader crackdown against alleged Chinese espionage on US companies.

He became the president of a Taiwanese branch under Micron, resigned in 2015 and brought trade secrets over to UMC and Fujian Jinhua, prosecutors said.

The semiconductor technology is a major component of advanced computing that will be central to developing artificial intelligence products for both commercial and military applications.

"Micron is worth an estimated $100 billion and has a 20 to 25 percent share of the dynamic random access memory industry-a technology not possessed by the Chinese until very recently". The team is composed of a senior FBI Executive, five United States attorneys, several other Department of Justice leaders and officials.

While at UMC, Chen recruited numerous Micron Taiwan employees, including Ho and Wang, according to the indictment.

The US Justice Department has charged companies in China and Taiwan with stealing trade secrets from a US semiconductor company, as the government steps up efforts to combat what it contends is Chinese technology theft. "We are here today to say, 'enough is enough.' We're not going to take it anymore", said Attorney General Jeff Sessions at a press conference.

United States investigators say the two, and especially Wang, downloaded and stole over 900 Micron confidential and proprietary files, which he kept on USB external hard drives and cloud storage accounts. "It's time for China to join the community of lawful nations".

The attorney general described it as a "brazen scheme" to steal and clone technology in order to compete with the US.

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Dmitri Alperovitch, a cyber expert and chief technology officer at the cybersecurity firm CrowdStrike, said the Chinese military curtailed its commercialhacking in 2016, but that over the previous year operatives affiliated with China's Ministry of State Security have increasingly taken up the slack, stealing military, medical, agricultural, high-tech and other secrets.

The charges filed on Thursday are the latest in a series of indictments that accuse China of elaborate efforts to steal corporate secrets through espionage and hacking. Ltd., a Chinese state-owned company; United Microelectronics Corp. Since the start of 2017, Sessions said, the Justice Department has charged three people with spying for China and is now prosecuting five Chinese economic espionage cases.

The announcement will be coupled with the unsealing of a criminal case in California involving the theft of trade secrets from a USA company, the official said.

Congress in August passed the Foreign Investment Risk Review Modernization Act to expand the government's power to review investments from foreign countries - a response to China's efforts to obtain USA technology through mergers, acquisitions and takeovers.

The Justice Department also filed a civil lawsuit that seeks to enjoin the transfer of stolen trade secrets in the case and to prevent the defendants from transferring information stolen in the case. They are accused of conspiring to steal technology from Micron Technology, an Idaho-based chipmaker that does extensive business in Asia. "It's bigger than intellectual property theft".

"We are committed to continuing to work closely with our federal, state, local, and private sector partners to counter this threat from China".

Sessions accused China of reneging on a 2015 agreement between Xi and former U.S. President Barack Obama that neither country would conduct economic espionage over the internet for the goal of "providing competitive advantages to companies or commercial sectors".

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