Micron chip sales banned in China in patent dispute with Taiwan's UMC

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

Micron said UMC's and Jinhua's patent infringement claims in China were filed in retaliation for the company's USA civil lawsuit against the two companies.

Shares in the sector had been shaken on Tuesday by the first reports of the ruling, which added to a growing list of intellectual property disputes between Washington and China in the technology sector.

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. UMC filed a patent infringement lawsuits against Micron in January.

On its part, Micron accused UMC of stealing its designs and trade secrets with a motive of helping the Chinese government develop its local memory chip industry.

The world DRAM market is led by Samsung Electronics with a market share of 45%, followed by SK Hynix (28%) and Micron (14%).

Micron official Joel Poppen was quoted in a release thus: "Micron is disappointed with the ruling by the Fuzhou Intermediate People's Court".

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.

Micron reiterated its fiscal fourth quarter revenue forecast of $8 billion to $8.4 billion.

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"UMC's move to deepen ties with China and the eagerness to join the Chinese chip ecosystem could definitely help it leverage more resources and gain business interests from the nation when many emerging Chinese chip providers still need technical support from Taiwan", said Liu.

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.

Li Yiqiang, a partner at law firm Faegre Baker Daniels, told Reuters that normally, Chinese courts set a very high bar for granting injunctions in complex patent infringement cases, but the trade tensions may have given the court more leeway in this case.

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.

UMC shares rose as much as 3.9 percent on Wednesday, before erasing a chunk of the gains to be up 1 percent.

UMC has not commented on the poaching allegations.

Other chipmakers also gained.

Analysts said the ruling would bolster Micron's well-established rivals. "So they have to import anyway", said Greg Roh, an analyst at Hyundai Motor Securities.

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