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Published: Sat, July 07, 2018
Economy | By Melissa Porter

Micron products barred from China in patent spat

Micron products barred from China in patent spat

The ruling, which hit shares of Idaho-based Micron and other US chipmakers on Tuesday, comes amid an escalating trade spat between Washington and Beijing over tariffs.

China placed a temporary ban on chip sales from Micron's Chinese subsidiaries, blocking the $59 billion company from the largest semiconductor market in the world, after a Chinese court ruled in favor of United Microelectronics' and Fujian Jinhua Integrated Circuit's January complaint that Micron infringed on patents in China protecting memory storage and other products. "UMC invests heavily in its intellectual property and aggressively pursues any company that infringes UMC's patents". Micron added the injunction will hurt its current fiscal fourth quarter revenue by "approximately" 1%, but the chipmaker continues to expect sales to be within the previously guided range of $8 billion to $8.4 billion U.S.

Earlier in the day, UMC said the injunction stops Micron from selling certain DRAM and NAND-related items, including solid-state hard drives and memory sticks in China.

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

The move comes after UMC took Micron to the Chinese courts over patent infringement claims. Micron still has the right to appeal, and the follow-up of this case is bound to become the focus of the global memory industry amid the critical stage for the US-China trade war.

"UMC is pleased with today's decision", UMC president Jason Wang said in a statement.

Micron said it has not been served with an injunction and would not comment further until it has received and reviewed court documentation.

Taiwan's United Microelectronics Corporations won its patent case brought against Micron Technology based in Idaho, in a court in China.

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 makes big business from selling its products to China.

Micron claimed ignorance about the ruling, saying it had not seen any paperwork from the Chinese court. One of the other companies, South Korea's SK Hynix, said the investigation is over suspected price fixing.

Other chipmakers also gained. When the ban on the sale of Micron products in China is realized, the ban is expected to benefit the Korean semiconductor industry.

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