Micron Rallies as It Says Injunction in China Won't Affect Its Quarter

Micron Rallies as It Says Injunction in China Won't Affect Its Quarter

Now, a court in China has ruled in favor of UMC and threatened to stop the import and sale of chips made by Micron.

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

The ruling is expected to help UMC build a good record that will help it secure regulatory approval from China to publicly list a subsidiary on the Shanghai Stock Exchange, dealers said. With the ruling, Micron's products now face injunction for violating UMC's patent rights in a court verdict that applies to all of mainland China.

This prompted UMC to countersue on January 12, filing a patent infringement lawsuit against Micron at the Fuzhou Intermediate People's Court.

The injunction prevents Micron from selling 26 semiconductor products, including DRAM and Nano flash memory chips, which are building blocks for mobile phones, computers, and other IT (information technology) devices, as well as solid-state computer hard drives (SSD), according to a July 3 online announcement on UMC's website.

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. In 2017, Micron generated about half of its $20.3 billion fiscal revenue from China.

Micron Technology offers Micron-branded products as well as Crucial-branded notebook DRAM modules and SSD.

The move comes after UMC took Micron to the Chinese courts over patent infringement claims.

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. Moreover, Micron has submitted compelling evidence to the Patent Review Board of China's State Intellectual Property Office demonstrating that the patents are invalid because they are directed to technologies that were previously developed and patented in other countries by other technology companies.

Founded in 1980 as a spin-out from from the government-led Industrial Technology Research Institute (ITRI) and Taiwan's first semiconductor company, United Microelectronics Corporation (UMC) is no stranger to lawsuits alleging intellectual property infringement: The company was sued by Nintendo in the 90s for producing chips for counterfeit game cartridges, and settled in 1994. That litigation is ongoing. Micron is the third largest DRAM manufacturer after Samsung Electronics and SK Hynix.

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