Micron Bounces Back From Chinese Lawsuit

Micron temporarily banned in China

Micron Bounces Back From Chinese Lawsuit

A Chinese court temporarily stopped America's largest memory-chip maker, Micron Technology Inc.

The Fuzhou Intermediate People's Court of the People's Republic of China issued the injunction against Micron for infringing patents for PRC 26 DRAM and NAND-related SSDs and memory sticks. "(Jinhua) dated July 3", the spokesman said.

Micron said it had not been served with the injunction and would not comment further until it had reviewed documentation from the Chinese court, according to Reuters.

The order undercuts the sale of DRAM modules and solid-state drives sold under Micron's Crucial and Ballistix brands. It predicted this will not affect its outlook for the August-ending fiscal Q4 of $8 billion to $8.4 billion. Its other top markets, the United States (about 13 percent) and Taiwan (about 12 percent), make up a much smaller share.

UMC, which is scaling up its China business, countersued in January, filing a patent infringement lawsuit against Micron in China, covering three areas, including specific memory applications and memory used in graphics cards. This time, though, it's in court for a different reason: It has accused U.S. rival Micron of infringing its patents on memory technology, and has been granted an early win in the form of a temporary injunction against the company.

The trade dispute has intensified in recent months as President Trump accused Chinese companies of stealing American technology, particularly in chips.

The ban comes amid an escalating trade spat between Washington and Beijing that is spurring China to accelerate its moves to develop domestic chipmakers in order to reduce its heavy reliance on US firms like Micron and Qualcomm, another USA -based chip maker.

UMC denies the allegations, and has filed to have the California case dismissed.

The ruling follows a recent raft of investigations by Chinese regulators into Micron and its South Korean rivals, SK Hynix and Samsung Electronics, on the grounds that the companies may be colluding to keep memory prices high.

Micron shares closed down 5.5 per cent at $51.48, while Nvidia finished 2 per cent lower. "I think there is room for the stock to continue to go higher".

Other chipmakers also gained.

However, today Micron reiterated its quarterly sales guidance, emphasizing that the injunction would only impact its overall sales by 1%.

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. The Chinese court made a preliminary ruling on this.

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