China bans Micron chip sales for alleged patent violations | Business| Economy and finance news from a German perspective | DW | 04.07.2018
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China bans Micron chip sales for alleged patent violations

A Chinese court has temporarily barred the US chipmaker from selling semiconductor products in the country, escalating a trade dispute between China and the US that's engulfing industries from steel to electronics.

In a patent ruling in favor of Taiwan's United Microelectronics Corporation (UMC), the Fuzhou Intermediate People's Court of the People's Republic of China has issued a preliminary injunction stopping Micron from selling 26 products, including dynamic random access memory and Nand flash memory-related products.

Idaho-based Micron was slapped with an injunction for "violating UMC's patent rights in a court verdict that applies to all of mainland China," UMC said in a statement on Tuesday that disclosed the ruling.

Read more: Trump's China trade dispute: Is it a war for tech supremacy?

Micron said in a statement it hadn't been served with the injunction yet and "will not be commenting further until the company has received and reviewed documentation from the Fuzhou Intermediate People's Court of China." Micron, which gets half of its revenue from China, saw its shares plummet 6.3 percent following the announcement.

UMC and its Chinese partners had filed patent infringement lawsuits against Micron subsidiaries in Chinese courts earlier this year, relating to several products including some solid-state hard drives and memory sticks.

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During the patent infringement trial, the remedies UMC sought were to stop Micron from making, importing or selling the allegedly infringing products, and also that Micron destroy all inventories and pay compensation.

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News agency Bloomberg reported that an official of the Chinese court had confirmed the injunction, but had refused to provide details of the ruling because the case is still ongoing.

The decision comes as China is investigating Micron and its South Korean rivals over price fixing allegations amid a surge in chip prices.

The case is also part of a broader dispute between the two companies after the US chipmaker accused UMC last year of stealing Micron's designs in an attempt to help China advance its domestic chip industry.

China is the world's largest semiconductor market, but isn't home to even one of the top 10 producers worldwide. The global chip market is mainly in the hands of Micron and its two Korean rivals, Samsung Electronics and SK Hynix.

Trade dispute escalation

The ruling by the Chinese court is likely to fuel trade tensions between China and the United States, unleashed by President Donald Trump, who accuses China of stealing US intellectual property.

On Monday, the Trump administration banned the world's largest mobile phone provider, China Mobile, from entering the American market, citing national security concerns.

China's Huawei and ZTE are also fighting US government action that threatens to cut them off from crucial suppliers and potential customers in the US.

Meanwhile, US chipmaker Qualcomm is still waiting for permission from Chinese regulators to complete its acquisition of NXP Semiconductors — a deal that was scheduled to be closed at the end of last year and has already been approved by regulators across the world.

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uhe/bb (Reuters, dpa, AFP)

 

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