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China technology

Chinese memory chip maker Fujian Jinhua says there’s been ‘no stealing of technology’ amid US export ban

  • The US last week slapped export restrictions on US companies working with Fujian Jinhua, citing national security concerns
  • Jinhua says it ‘has been pursuing self-independence in research and development’, urges Micron to resume normal relations between two companies
PUBLISHED : Monday, 05 November, 2018, 12:31pm
UPDATED : Monday, 05 November, 2018, 11:00pm

Chinese state-backed memory chip maker Fujian Jinhua Integrated Circuit Co denied it has stolen technology from others after the US Justice Department last week indicted the company and three individuals for conspiring to steal trade secrets from US semiconductor firm Micron Technology.

The US last week also slapped export restrictions on US companies working with Fujian Jinhua, citing national security concerns, in a similar move to the trade ban that earlier crippled the operations of ZTE Corp for three months this year before the telecoms equipment maker agreed to a settlement with Washington in July.

“Jinhua has been pursuing self-independence in research and development,” the company said in a statement published on its homepage on Saturday, breaking its silence for the first time on the ban. “There’s no stealing of technology from other companies.”

Fujian Jinhua also had some stern words for Micron.

“Micron regards the development of Jinhua as a threat and has tried various means to stall or even sabotage it,” according to the company statement. “[We urge Micron] to immediately stop wrongdoings and facilitate the resumption of normal trade and cooperation activities between the two parties.”

Semiconductors are at the centre of a technology gap that the world’s second-largest economy wants to close amid an escalating trade war with the US. These integrated circuits go into and power everything from smartphones to smart speakers to the most advanced super computers and driverless cars.

No mainland Chinese semiconductor company has so far been able to crack the world’s top 20 ranking in terms of chip sales, which are dominated by companies from the US, Japan, South Korea and western Europe.

Jinhua did not have any further comment when reached by phone on Monday.

China’s semiconductor catch-up efforts dealt blow by US sanction against mainland chip maker

The US Commerce Department put Jinhua on its Entity List last week, which identifies those “reasonably believed to be involved, or to pose a significant risk of being or becoming involved, in activities contrary to the national security or foreign policy interests of the United States”, according to a statement released by the agency.

The US move may put in limbo Jinhua’s trial production of dynamic random access memory (DRAM) chips that it started this year, as the company nears completion of its US$5.65 billion fabrication facility in Jinjiang, a city in the southeast coastal province of Fujian.

Washington’s action followed a US lawsuit filed in December last year by Micron Technology against United Microelectronics Corp (UMC) for allegedly stealing its intellectual property and passing it on to mainland partner Jinhua after the Taiwanese chip foundry hired three former Micron employees.

UMC denied that accusation and joined Jinhua in January to file a countersuit against Micron in the Fuzhou Intermediate People’s Court, located in the capital of Fujian province, for infringing certain memory applications.

“The theft of intellectual property is not only unfair, but stifles technological innovation by disincentivizing investment in long-term research and development,” said US lawyer Alex Tse in the statement released on Thursday explaining the indictment.

“The theft of intellectual property on a continuing basis by nation-state actors is an even more damaging affront to the rule of law.”

US indicts Chinese and Taiwanese for ‘stealing from chip giant Micron’

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

Founded in 2016, Jinhua received a 3 billion yuan (US$431 million) investment from the China Integrated Circuit Industry Investment Fund, a state-backed entity known as the “Big Fund”, in July last year as part of the country’s efforts to become more self-sufficient in semiconductors and other “core” technologies.

Jinhua, along with Hefei Changxin Integrated Manufacture Co and Yangtze Memory Technologies Co, are leading Chinese start-up manufacturers of memory products, with new plants slated to open in the coming two years, according to market intelligence provider TrendForce.

Jinhua’s new plant is expected to have a production capacity of 60,000 chips per month and generate annual revenue US$1.2 billion, according to a research note by Zhongtai Securities in July. Jinghua plans to expand the facility to support a monthly manufacturing target of 240,000 chips.

Tsinghua Unigroup president calls for coexistence with foreign chip giants amid country’s efforts to catch up in semiconductors

In April, Chinese President Xi Jinping made a visit to an affiliate of Yangtze Memory Technologies in Wuhan, capital of Hubei province, where he called for “tough battles” to achieve the country’s two centenary goals.

“No matter how big a person is, he or she can never be strong without a sound and strong heart,” Xi was quoted as saying, according to the China Daily, likening chips to a human heart, while urging companies to make breakthroughs in chip technology and reach new heights in the global semiconductor industry.