Published: Sat, July 07, 2018
Money | By Armando Alvarado

Micron Rallies as It Says Injunction in China Won't Affect Its Quarter

Micron Rallies as It Says Injunction in China Won't Affect Its Quarter

United Microelectronics Corporation (UMC) and Jinhua sought the sales ban, alleging that Micron violated its patent rights in China.

The injunction also comes amid escalating trade tensions between the United States and China over tariffs.

"UMC is pleased with today's decision".

In its civil complaint in December, Micron accused UMC of attempting to recruit high level personnel in Taiwan and entice former staff at Micron Taiwan to steal files which could help Jinhua, at the time little-known, to jumpstart China's campaign of developing its own technology for chips. In January, UMC filed a patent infringement lawsuits against Micron.

Only this week, the company said it was planning to list its HeJian Technology Corp., its China operations, on the Shanghai Stock Exchange.

Other semiconductor shares suffered as well on the news as the battle between Micron and China is considered a bellwether amidst a trade fight between Beijing and Washington, and China's attempt to gain advanced chip tech and knowledge.

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.

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Micron Technology is rebounding after saying its temporary ban in China will have a limited impact on revenue.

As of 11:42 a.m., shares of UMC had gained 0.56 percent to NT$18.05 (US$0.58), with 81.87 million shares changing hands, outperforming the broader market index, which was down 0.12 percent at 10,702.91.

Under the Chinese yuan-denominated A share listing plan announced last week, wafer foundry Hejian will merge with two of its own units - contract chipmaker United Semiconductor (Xiamen) Co. and integrated circuit designer UnitedDS Semiconductor (Shandong) Co. - to issue 400 million new shares.

The Court has not yet indicated when a final ruling on the case can be expected, nor for how long the injunction on sales is valid. But it also said that restrictions will only hurt its business slightly.

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. He believes the antitrust investigation on SK Hynix and Samsung Electronics demonstrated that Chinese authorities intend to "hold Korean semiconductors in check".

In the semiconductor industry, experts say that China pursuing the rapid growth of the Chinese semiconductor industry sided with the Chinese company.

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