A Chinese court has temporarily halted a US memory chip maker from selling its semiconductor products in China, a move that could further intensify the ongoing trade dispute between Beijing and Washington.
UMC announced that it has secured an injunction against the sale of certain Micron Technology products in China as part of a patent infringement suit.
Micron official Joel Poppen was quoted in a release thus: "Micron is disappointed with the ruling by the Fuzhou Intermediate People's Court". It predicted this will not affect its outlook for the August-ending fiscal Q4 of $8 billion to $8.4 billion.
UMC shares rose as much as 3.9 percent on Wednesday, before erasing a chunk of the gains to be up 1 percent. UMC and Micron have gone back and forth in the courts, alleging various intellectual property violations. UMC's comprehensive foundry solutions enable chip designers to leverage the company's sophisticated technology and manufacturing, which include world-class 28nm High-K/Metal Gate technology, 14nm FinFET volume production, specialty process platforms specifically developed for AI, 5G and IoT applications and the automotive industry's highest-rated AEC-Q100 Grade-0 manufacturing capabilities for the production of ICs found in vehicles.
The patent ruling Tuesday in favor of Micron's rivals comes as US accusations of intellectual-property theft by Chinese businesses and tariff threats increase tensions between Washington and Beijing. Jinhua has denied the allegations.
The ban, along with a separate antitrust probe by China in early June against Micron and two South Korean chipmakers, SK Hynix and Samsung Electronics, are all "politically connected and intertwined", said Arisa Liu, an analyst with Taiwan Institute of Economic Research, a leading nonprofit think tank in Taiwan, in an interview with Japanese magazine Nikkei Asian Review.
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.
Commenting on the decision, co-president of UMC Jason Wang, said: "UMC is pleased with today's decision". Micron's stock fell 5.51% in after-hours trading. If the judgment is enforced in the future, Micron will be prohibited from selling some of its memory products in China.
Other chipmakers also gained.
China is the largest importer of memory products, consuming 20 percent of the world's DRAM, as it has yet to build up its nascent chip industry.
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.
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