UMC, Fujian Jinhua indicted for alleged Micron tech theft

The US Department of Justice (DoJ) has filed charges against state-owned Chinese chip maker Fujian Jinhua Integrated Circuit and Taiwanese foundry United Microelectronics Corporation (UMC), along with three Taiwanese citizens, accusing them of having stolen trade secrets from US memory maker Micron.

Micron's argument with Taiwan's United Microelectronics Corporation (UMC), spun out from the government-led Industrial Technology Research Institute (ITRI) to form the nation's first semiconductor company in 1980, spilled into the public domain in July this year when selected Micron products were barred from import or sale in China over allegations that the company had infringed UMC-held patents. Now, though, UMC itself stands accused of outright theft, with the US Department of Justice filing charges against it and Chinese chip maker Fujian Jinhua Integrated Circuit.

'I am announcing that a grand jury in San Francisco has returned a multi-defendant indictment alleging economic espionage on the part of a state-owned Chinese company [Fujian Jinhua], a Taiwanese company [UMC], and three Taiwan individuals for an alleged scheme to steal trade secrets from Micron, an Idaho-based semi-conductor company,' says US Attorney General Jeff Sessions of the charges. 'Micron is worth an estimated $100 billion and has a 20 to 25 percent share of the dynamic random access memory industry - a technology not possessed by the Chinese until very recently. As this and other recent cases have shown, Chinese economic espionage against the United States has been increasing - and it has been increasing rapidly. I am here to say that enough is enough. With integrity and professionalism, the Department of Justice will aggressively prosecute such illegal activity.'

The charges accuse the three named individuals of a conspiracy to steal Micron trade secrets relating to the development and manufacture of memory products. 'Prior to the events described in the indictment, the PRC [People's Republic of China] did not possess DRAM technology, and the Central Government and State Council of the PRC publicly identified the development of DRAM and other microelectronics technology as a national economic priority,' the DoJ claims, accusing Taiwan national Chen Zhengkun, also known as Stephen Chen, of having used his position at Micron Memory Taiwan (MMT), obtained when Micron acquired the company of which he was general manager and chair in 2013, to transfer MMT technology to UMC from where it would be sent to Fujian Jinhua for mass production - for which he was rewarded, the charges state, with becoming president of Fujian Jinhua. Two other former MMT staff, He Jianting, also known as J. T. Ho, and Wang Yungming, also known as Kenny Wang.

The filing of an indictment, however, is not proof of guilt: The DoJ will now oversee an investigation into the claims, which if proven come with the potential for 15 years imprisonment and a $5 million fine per charge of economic espionage and a further 10 years imprisonment for theft of trade secrets, while the companies involved face $20 billion in fines and forfeiture.

Full details on the case are available from the indictment (PDF warning).