U.S. court rules prosecutors failed to prove chipmaker stole proprietary data

Chinese semiconductor manufacturer Fujian Jinhua Integrated Circuit Co has been found not guilty of the alleged stealing of trade secrets from U.S. memory chipmaker Micron Technology Inc, bringing to an end a five-year-long legal battle.

Experts said this will benefit the long-term development of China's chip industry.

U.S. District Judge Maxine Chesney told a court in San Francisco on Wednesday that the Chinese company was not guilty of economic espionage and other criminal charges, concluding that the U.S. prosecutors failed to prove Fujian Jinhua misappropriated proprietary data from Micron.

Fujian Jinhua welcomes the court ruling, the company said in a statement on its official website.

It said it has always operated in accordance with laws and has respected intellectual property rights.

The order came after Micron said in December that it had settled an intellectual property lawsuit with Fujian Jinhua, adding that the two companies would dismiss complaints against the other party and end all lawsuits between them globally.

Xiang Ligang, director-general of the Information Consumption Alliance, a telecom industry association in Beijing, said Fujian Jinhua can carry out normal business activities since allegations against it have been cleared, and that the move will have a positive impact on the healthy development of China's memory chip sector.

"Meanwhile, Chinese chip companies should ramp up their research and development inputs and improve independent innovation capacities in core technologies to mitigate the potential risks brought on by further possible sanctions from the U.S. government," Xiang said.

In 2017, Micron sued Fujian Jinhua and the latter's partner United Microelectronics Corp in U.S. courts, accusing the two of stealing the company's memory chip trade secrets.

The U.S. Department of Justice in 2018 announced an indictment against Fujian Jinhua, alleging it stole intellectual property from Micron. That same year, the U.S. authorities added the Chinese company to its "entity list", barring it from buying components, software or technology goods from U.S. firms without special approval.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said the ruling is of significance for the U.S. in dealing with IPR disputes against China through judicial processes in the future, and may influence U.S. government actions toward China.

He said against the backdrop of globalization, no country in the world can unilaterally accuse and suppress companies of other countries groundlessly based on its own laws and interests.

"For any company that wants to be a global leader, China serves as an important market that cannot be abandoned. Chinese semiconductor companies are playing a vital role in bolstering the upgrade of the global industrial chain," Zhou said.

Curbs targeting China's technology development do not benefit anyone and will eventually backfire, he added.

According to data from the National Bureau of Statistics, the country's integrated circuits output reached 351.4 billion units last year, surging by 6.9 percent year-on-year.

Roger Sheng, vice-president of research at U.S. market research company Gartner Inc, said settlement of the IP lawsuit between Micron and Fujian Jinhua also showed that Micron is eager to expand its business in the world's largest chip market.

The U.S. chip company said last June that it will invest about 4.3 billion yuan ($597.6 million) in its chip packaging plant in Xi'an, Shaanxi province, over the next few years.

In November, Minister of Commerce Wang Wentao met with Sanjay Mehrotra, president and CEO of Micron, wherein the latter expressed a willingness to continue expanding its investments in China.

According to a report by Trend-Force, as of the third quarter of 2023, Samsung leads the global dynamic random access memory chips market with a share of 38.9 percent, followed by SK Hynix (34.3 percent) and Micron (22.8 percent).

Global semiconductor sales totaled $526.8 billion in 2023, a decrease of 8.2 percent year-on-year, according to the Semiconductor Industry Association.
The association said global semiconductor sales were sluggish early in 2023 but rebounded strongly during the second half of the year. It has predicted double-digit market growth for 2024.

Source: China Daily