Taiwan’s UMC to aid US pursuit of Chinese chip maker Fujian Jinhua over alleged theft of Micron trade secrets
- US prosecutors have agreed to drop serious charges of economic espionage and conspiracy against UMC
- UMC has pledged ‘substantial assistance’ to the US for the case against Fujian Jinhua over the alleged theft of proprietary information from Micron
Taiwan’s United Microelectronics Corporation (UMC) pledged “substantial assistance” to the US in a high-profile trade-secrets prosecution of Chinese chip maker Fujian Jinhua Integrated Circuit.
UMC pleaded guilty Wednesday in San Francisco federal court in a deal with US prosecutors, who agreed to drop serious charges of economic espionage and conspiracy for the alleged theft of proprietary information from Idaho-based Micron Technology. UMC instead admitted to trade-secret theft and agreed to pay a US$60 million fine.
The guilty plea resolves one piece of a complicated, international prosecution of an allegedly illegal transfer of Micron’s memory design in a chip manufacturing deal between Taiwan-based UMC and Jinjiang-based Fujian Jinhua. But it also leaves key questions unanswered.
The case was the first filed under the Trump administration’s “China Initiative,” a Justice Department program aimed at prioritising trade-theft cases and litigating them as quickly as possible. With UMC removed as a defendant, China becomes the target as tension with the West is aggravated by issues including Beijing’s hacking and control of key technologies, its handling of the Covid-19 outbreak, tightening grip over Hong Kong and treatment of Muslim Uygurs.
“UMC takes full responsibility for the actions of its employees, and we are pleased to have reached an appropriate resolution regarding this matter,” the company said in a statement.
Taiwan‘s UMC hopes to settle US trade-secret lawsuit soon
“UMC’s guilty plea points this case towards trial against Fujian Jinhua in 2021,” said US lawyer David L Anderson. “Criminal trade secrets cases protect freedom and innovation. These cases have global significance when a foreign defendant is charged with stealing intellectual property protected by US law.”
Fujian Jinhua could not immediately be reached for comment.
Prosecutors have not publicly detailed the cooperation they are seeking from UMC against Fujian Jinhua, and UMC itself declined to comment on it. UMC’s plea means the Taiwan-based company is now helping in the criminal prosecution of a former Chinese business partner, potentially exacerbating tensions.
Charges are still pending against three individual defendants, the former president of Fujian Jinhua and two UMC engineers. One of them, JT Ho, still works at UMC, according to the company. The US maintains arrest warrants for all three.
Neal Stephens, a lawyer for Micron, told US District Judge Maxine M Chesney that with the resolution of the criminal case against UMC, Micron will push forward with its civil trade-secrets case against the company, which had been put on hold. UMC has opposed reopening the case, Stephens said.
Still unknown is how much more money UMC will ultimately pay. In addition to the US fine, Micron will seek to make UMC pay restitution for the loss and damages caused by the theft. The companies agreed the sum will be argued in the civil suit because there’s a “great gulf and disparity” between what the two sides believe the value to be, said Leslie Caldwell, a lawyer for UMC.
The criminal case is US v United Microelectronics Corp, 18-cr-00465; the civil suit is Micron v United Microelectronics and Fujian Jinhua, 17-cv-06932, US District Court for the Northern District of California (San Francisco).
