China Places Clamps on Micron Sales

China Places Clamps on Micron Sales

China Places Clamps on Micron Sales

US flash memory chip maker Micron Technology Inc. saw its share price take a pummeling today on the news that a Chinese court has temporarily banned it from doing business in that country.

UMC filed patent infringement lawsuits against Micron in China in January.

Micron said the injunction relates to certain of its Crucial and Ballistix-branded memory modules and solid state drives sold in China.

On the news, Micron shares fell by up to 8%, while UMC shares jumped 3.9% in early trading Wednesday in Taipei.

In the semiconductor industry, experts say that China pursuing the rapid growth of the Chinese semiconductor industry sided with the Chinese company. Joel Poppen, Micron's general counsel, added that it "will continue to aggressively defend against these unfounded patent infringement claims while continuing to work closely with its customers and partners".

China is escalating the trade war with the USA while making an announcement of a ban on the sale of products of Micron, a United States semiconductor company, in China.

Micron and UMC have been at loggerheads over the issue of stealing trade secrets in the Chinese court since a year ago. We strongly believe that the patents are invalid and that Micron's products do not infringe the patents.

The latest ruling means Micron's products face further injunction for violating UMC's patent rights in a court verdict that applies to all of mainland China.

UMC co-president Jason Wang, commented, "UMC is pleased with today's decision".

Analysts believe the ban is largely symbolic as hurting the US chipmaker would end up creating more pain for local Chinese firms who would have to rely on Korean firms Samsung Electronics and SK Hynix, pushing up memory chip prices.

Shares of Micron, which generated half of its $20.3 billion fiscal 2017 revenue from China, closed down 5.5 percent on Tuesday at $51.48.

Micron, according to reports, has not been served with the injunction.

Other chipmakers also gained.

"In the end, the Chinese court is expected to withdraw the preliminary ruling", said the official.

The competitors of Micron include Samsung Electronics Co., Ltd., Intel Corporation, SanDisk Corporation, Toshiba Corporation, and SK Hynix Inc.

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.

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