United States charges Chinese and Taiwanese companies for stealing Micron DRAM technology

Posted 02 November 2018 23:55 CET by Jan Willem Aldershoff

The United States Department of Justice has charged Taiwanese company UMC, Chinese company Jinhua and three individuals for crimes related to a conspiracy to steal, convey, and possess stolen trade secrets of American chip manufacturer Micron. The charged individuals are reportedly former Taiwanese Micron employees.

All defendants are charged with a conspiracy to commit economic espionage, among other crimes. UMC, together with Jinhua allegedly stole trade secrets from Micron to advance their DRAM development.

Jinhua is a state-owned enterprise funded entirely by the Chinese government. It was established in February 2016, according to the U.S. Department of Justice, for the sole purpose of designing, developing, and manufacturing DRAM.

“No country presents a broader, more severe threat to our ideas, our innovation, and our economic security than China,” said FBI Director Christopher Wray.

He went on to say, “The Chinese government is determined to acquire American technology, and they’re willing use a variety of means to do that – from foreign investments, corporate acquisitions, and cyber intrusions to obtaining the services of current or former company employees to get inside information.”

Before the events described in the indictment, China did not have access to any technology related to DRAM, according to the Department of Justice. Which also adds that the China government publicly identified the development of DRAM and other microelectronics technology as a national economic priority.

Earlier this week, the United States already restricted exports to Jinhua because it considered the company, “a significant risk of becoming involved in activities that are contrary to the national security interests of the United States.”

Taiwanese authorities already filed complaints against UMC and three of its employees that were related to this case. The three employees worked for Micron prior to their job at UMC and are now also charged by the U.S. Department of Justice. One of the former Micron employees that later worked for UMC, eventually became the president of Jinhua and was put in charge of the China-based firm’s DRAM production facility. From that position he arranged the cooperation between UMC and Jinhua.

Micron positively responded to decision of the U.S. Department of Justice’s decision to prosecute the companies and individuals.

“Micron has invested billions of dollars over decades to develop its intellectual property. The actions announced today reinforce that criminal misappropriation will be appropriately addressed,” said Joel Poppen, senior vice president, legal affairs, general counsel and corporate secretary at Micron Technology.

The former Micron employees will face a $5 million fine if they are convicted for economic espionage charges. For that they could also end up  in jail for 15 years. For the theft of trade secrets another 10 years could be added. UMC and Jinhua each face forfeiture and a maximum fine of more than $20 billion.

Taiwanese tech website Digitimes asked UMC for a response. The company stated, “UMC takes seriously any allegation that it may have violated any laws and fully intends to respond to these allegations accordingly.”

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