Micron chip sales banned in China in patent dispute with Taiwan’s UMC
TAIPEI (Reuters) – A Chinese court has temporarily barred Micron Technology Inc (MU.O) from selling 26 semiconductor products in the world’s biggest memory chip market, citing violation of patents held by Taiwan’s United Microelectronics Corp (UMC) (2303.TW).
The ruling, which was disclosed by UMC and its Chinese partner, slammed shares of Idaho-based Micron, which gets half of its revenue from China.
It comes amid an escalating trade spat between Washington and Beijing over tariffs and also as China investigates Micron and its South Korean rivals over price fixing allegations, amid a surge in prices of dynamic random access memory (DRAM) chips.
The Fuzhou Intermediate People’s Court issued a preliminary sales injunction against Micron that prevents it from selling the chips, including DRAM chips and NAND flash memory chips, in China, UMC said in a statement late on Tuesday.
Micron said it had not been served with the injunction and would not comment further until it had reviewed documentation from the Chinese court.
The sales ban ratchets up trade tensions between Washington and China over wide ranging issues including intellectual property, autos and soybeans. The United States is set to impose tariffs on $34 billion (£25.75 billion) worth of goods from China on July 6, which Beijing is expected to respond to with tariffs of its own.
The two chipmakers have been at loggerheads since December when Micron filed a civil lawsuit in the state of California, accusing UMC and its state-backed Chinese partner Fujian Jinhua Integrated Circuit Co of stealing design and manufacturing technologies related to its DRAM chips.
UMC, which is scaling up its China business, countersued in January, filing a patent infringement lawsuit against Micron in China, covering three areas, including specific memory applications and memory used in graphics cards.
China is the largest importer of memory products, consuming 20 percent of the world’s DRAM, as it has yet to build up its nascent chip industry. Its ambitious plan to grow the sector through acquisitions and partnerships have been hampered by security concerns raised largely by Washington.
UMC, a contract chip manufacturer, plans to list its China operations on the Shanghai Stock Exchange.
Fujian Jinhua also issued a statement on Tuesday saying the court had ruled against Micron. A company spokesman declined to comment further.
Shares of Micron, which generated half of its $20.3 billion fiscal 2017 revenue from China, closed down 5.5 percent on Tuesday at $51.48. Other US chipmakers were also weak, with Nvidia (NVDA.O) finishing 2 percent lower and Intel Corp (INTC.O) and Broadcom Inc (AVGO.O) closing down 1 percent each.
UMC shares rose as much as 3.9 percent on Wednesday, before erasing a chunk of the gains to be up 1 percent.