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UMC Settles Technology Theft Legal Battle With Micron

(Image credit: UMC)

Micron Technology and United Microelectronics Corp. (UMC) on Thursday said they had reached a global settlement agreement. The companies will cease legal battles worldwide and UMC will make a one-time payment to Micron. The undisclosed payment will settle all claims of theft relating to its DRAM process technology and subsequent sale to one of the Chinese memory manufacturers.

The two companies did not disclose how much UMC will pay Micron, but said it would be a one-time payment, so Micron will eventually have to disclose it in one of its financial reports (a number that will be very interesting to know). Last year UMC admitted in a U.S. court that it illegally obtained crucial IP and trade secrets (which basically means a process technology) required to produce DRAM and then passed it to Fujian Jinhua Integrated Circuit Company (aka Fujian or JHICC), a China-based DRAM maker. The contract maker of chips paid a fine of approximately $60 million to the U.S. Department of Justice, which accused JHICC and UMC of corporate espionage and conspiracy. UMC also paid a fine of $3.4 million in Taiwan.

It all started in early 2016 when local authorities in Fujian, China, established DRAM JHICC to support the country's 'Made in China 2025' semiconductor industry development program. JHICC had no team to develop a memory production technology in a relatively short period of time, so it signed a development deal with UMC before commencing construction of its $5.65-billion 300-mm fab in July 2016. 

Micron claimed that UMC, a contract maker of logic chips that does not produce computer memory, poached engineers from its Taiwan subsidiaries and tasked them to get specifications and other peculiarities of Micron's fabrication technologies. The U.S. authorities claim that under the terms of the contract between JHICC and UMC, the DRAM maker would provide the foundry $300 million for acquiring tools required to design a DRAM node and would pay UMC $400 million based on the progress of DRAM development. 

Micron sued both UMC and JHICC in 2017, whereas the U.S. government accused JHICC and UMC of industrial espionage, prohibited JHICC's products from being imported to the U.S., and added the DRAM maker to the Entity List, effectively barring it from obtaining any equipment or technology developed in the U.S. In response, JHICC and UMC sued Micron in Fuijan, accusing it of infringing patents originally issued to UMC in China.

By now, JHICC's story is generally over as the company ended all production in early 2019, but its website is still up and running. Micron has protected its legal rights and generally eliminated a rival from China. UMC has allegedly got hundreds of millions of dollars worth of equipment along with payments from JHICC and settled with the U.S. government. As a result, it was time for Micron and UMC to settle their financial disputes.

The statement by Micron and UMC reads as follows:

"United Microelectronics Corporation and Micron Technology today announced a settlement agreement between the two companies worldwide. The companies will globally withdraw their complaints against the other party, and UMC will make a one-time payment of an undisclosed amount to Micron. UMC and Micron look forward to engaging in mutual business cooperation opportunities."