Micron Technology Faces Ban in China After Losing IP Spat to UMC

[btarunr]

Stocks of Micron Technology tanked on Tuesday as reports emerged of the company being banned in China, the world's largest semiconductor market. A Chinese court ruled in favor of Taiwanese semiconductor foundry UMC in its patent infringement lawsuit against Micron. The Fuzhou Intermediate People's Court issued a preliminary injunction stopping the sale of 26 Micron products, spanning across both its DRAM and NAND flash product lines, UMC said in a statement.

Micron, meanwhile, maintains that it hasn't read the injunction order yet, and that it won't comment until it does. Micron's position is doing precious little in stopping its hemorrhage at the markets, as its stock prices fell 8 percent at the time of this writing. The Micron-UMC spat is fascinating in a broader geopolitical context. Micron accuses UMC of serving as a conduit for funneling away its IP to midwife Chinese DRAM companies such as Fujian Jinhua Integrated Circuit Co. It is the counter-suit to this by UMC, which was won today. China accounted to more than 50 percent of Micron's revenues in FY 2017, with most of the chips being mopped up by the consumer electronics and PC manufacturing industries.



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[Flyordie]

Looks like all these chip companies are going to be dying in the grave they dug themselves.

When you manufacture in china, china owns that factory and IP.

This is why we NEVER looked at China as a favorable location to do business and I hope all the other chip makers start realizing this and make the changes ASAP.

 

[windwhirl]

Maybe it's a good time to go back to the US?

Unless, of course, there is a rare-earth elements issue too.

 

[AlwaysHope]

Looks like all these chip companies are going to be dying in the grave they dug themselves.

When you manufacture in china, china owns that factory and IP.

This is why we NEVER looked at China as a favorable location to do business and I hope all the other chip makers start realizing this and make the changes ASAP.

Your absolutely right. When Clinton was POTUS, he assumed moving US businesses to China would help change CCP. HOW WRONG HE WAS!

 

[AsRock]

I wounder if this is coming for other company's too.

Looks like all these chip companies are going to be dying in the grave they dug themselves.

Better hope not, changes are going be bad enough and if any these company's go bump the prices will increase even more.

 

[the54thvoid]

Your absolutely right. When Clinton was POTUS, he assumed moving US businesses to China would help change CCP. HOW WRONG HE WAS!

Almost all businesses move production to where labor is cheaper. It's what keeps pricing down for us. Clothing, tech, even food. While government may arrange better tax situations, it's the private companies that decide where to move their production. It's economics 101.
It's why I don't mind paying more for certain products I know are made in the UK, or at least somewhere a decent wage was paid to a worker.
Unfortunately, tech is expensive anyway because the private companies, Apple, Intel, Nvidia, Micron, Hynix etc, all pretty much reap the profits for the shareholders.

 

[R0H1T]

Almost all businesses move production to where labor is cheaper. It's what keeps pricing down for us. Clothing, tech, even food. While government may arrange better tax situations, it's the private companies that decide where to move their production. It's economics 101.
It's why I don't mind paying more for certain products I know are made in the UK, or at least somewhere a decent wage was paid to a worker.
Unfortunately, tech is expensive anyway because the private companies, Apple, Intel, Nvidia, Micron, Hynix etc, all pretty much reap the profits for the shareholders.

Except it isn't private companies that decided on giving up their tech, it's the Western govts that allowed this to happen in exchange for a piece of an enormously lucrative market - which they'll never get a hold of. Also allowing China to steal their tech, this should never been allowed in the first place. UMC was a disaster waiting to happen, the same will be the case when AMD & Via's x86 JV in China kicks the minority shareholder out or the CCP decides they no longer want to buy Intel.

 

[the54thvoid]

Except it isn't private companies that decided on giving up their tech, it's the Western govts that allowed this to happen in exchange for a piece of an enormously lucrative market - which they'll never get a hold of. Also allowing China to steal their tech, this should never been allowed in the first place. UMC was a disaster waiting to happen, the same will be the case when AMD & Via's x86 JV in China kicks the minority shareholder out or the CCP decides they no longer want to buy Intel.

Western governments generally don't own private business. Those businesses are free to move to highly lucrative emerging markets. If you suggest the governments should control all domestic companies business plans, that sounds a bit communist in its own right. The simple fact is this: businesses, as you rightly said, wanted a piece of a highly lucrative market. And yes, China sanctioned and tolerated IP theft (I particularly recall Chinese BMW's). But it was the decision of a private business to do so, governments can only stop them when sanctions are in place (such as N Korea & Iran). Politicians are greedy, yes, but so too are businesses and when they risk ventures in a foreign and often corrupt territory, it is they who are to blame (as well as the corrupt government).

EDIT: In really B&W terms, if I know a guy is shady but I can get a good deal from him, I enter that deal knowing I'm taking a risk. That's what any business did when it entered China.