Economy

Micron says has not received Chinese injunction on chip sales

Micron says has not received Chinese injunction on chip sales”

What just happened? USA semiconductor giant Micron has had sales of its chips temporarily banned in China by one of the country's courts.

The stock is responding favorably, up $1.79, or 3.5%, at $53.27, in early trading.

To counter the lawsuit, UMC sued Micron in China in January 2018, accusing the American company of stealing its patents registered in China. It said the United States company's products infringed on three of its patents related to DDR4, SSDs, and graphic card memory. Moore pointed out that the $42 million in damages requested by UMC are minimal compared to Micron's $32 billion revenue run rate. It also asked that all inventory be destroyed and applied for compensation.

UMC co-president Jason Wang, commented, "UMC is pleased with today's decision".

UMC filed its complaint against Micron in January, saying the USA firm had infringed on three of its patents covering its SSD, graphics memory card and DDR4 SDRAM products.

The latest ruling means Micron's products face further injunction for violating UMC's patent rights in a court verdict that applies to all of mainland China. Joel Poppen, Micron's general counsel, added that it "will continue to aggressively defend against these unfounded patent infringement claims while continuing to work closely with its customers and partners".

The U.S. case brought by Micron sprang out of a criminal indictment in August of 2017 in Taiwan brought against UMC as well as one of its partners Fujian Jinhua Integrated.

Analysts believe the ban is largely symbolic as hurting the US chipmaker would end up creating more pain for local Chinese firms who would have to rely on Korean firms Samsung Electronics and SK Hynix, pushing up memory chip prices.

The Micron ban could be a major opportunity for other global chipmakers to step in. Because China cannot replace Micron's supply of chips with its own domestically produced chips, this could ultimately lead to a reversal of the court's ban, according to an unnamed official in South Korea's semiconductor industry, in an interview with South Korean news portal Business Korea.

Fujian Jinhua also issued a statement on Tuesday saying the court had ruled against Micron. China buys far more chips than any other country, and about 90% came from foreign companies previous year, according to technology consultancy International Business Strategies.

The delay in approving the deal has coincided with uncertainty over the fate of Chinese smartphone and telecommunications company ZTE.



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