January 20, 2019

China Places Clamps on Micron Sales

07 July 2018, 03:59 | Joann Bryant

Semiconductors are among China's biggest imports rivalling oil More

Semiconductors are among China's biggest imports rivalling oil

A Chinese technology firm embroiled in a patent dispute with United States chip giant Micron said Wednesday that a court had ruled in its favour and ordered an immediate halt of several Micron products in China.

On Tuesday, UMC announced that the Fuzhou Intermediate People's Court of the People's Republic of China (PRC) issued a preliminary injunction against Micron Semiconductor (Xi'an) and Micron Semiconductor (Shanghai), enjoining Micron from offering to sell, and selling in the PRC 26 DRAM and NAND-related items, including certain solid-state hard drives and memory sticks in China.

Micron said it expects quarterly revenue to be within the previously guided range of $8.0 billion to $8.4 billion. In January, UMC filed a patent infringement lawsuit against Micron in China. Micron said that its claims "rely on distorted interpretations of the patents and improper evidence". This ruling and other actions by the Fuzhou Court are inconsistent with providing a fair hearing through appropriate legal processes and procedures. 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". Its headquarters are located in Boise, Idaho. That has raised prices for its products. That deal was scheduled to be closed at the end of past year and has been approved everywhere else in the world.

The US memory chip maker, along with South Korean rivals, SK Hynix, Inc. and Samsung Electronics Co. dominate the Chinese chip market.

The case comes amid increasing trade friction between the world's top two economies, with billions of dollars in fresh trade tariffs due to come into force on Friday.

The dispute follows a ban on USA firms supplying parts to China's telecom equipment maker ZTE as well as the drawn-out wait for Chinese regulators to approve Qualcomm Inc's $44 billion takeover of NXP Semiconductors.

For example, Qualcomm designs its chips at its San Diego headquarters, then has them manufactured in countries including Taiwan and Korea.

Simultaneously, China is trying to reduce its dependence on imported chips.

According to Wang, Micron now supplies SSD modules to Alibaba, China's largest e-retailer; Huawei, the world's third-largest smartphone maker; Tencent Holdings, a Chinese conglomerate providing internet and telecommunications services; and Baidu, China's largest search engine.

Several Chinese government-backed entities have poured billions into research and for buying companies with a trove of chip patents.

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