Global memory market likely to reshuffle with UMC win United Microelectronics Corporation

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Micron has been barred from selling certain memory chips in China after a preliminary ruling came down in patent infringement cases brought against it by United Microelectronics Corporation and Fujian Jinhua Integrated Circuit.

A spokesman for Micron, which is based in Idaho, said Wednesday that the company hasn't yet received the court order and won't comment until it does.

To counter the lawsuit, UMC sued Micron in China in January 2018, accusing the American company of stealing its patents registered in China.

What just happened? U.S. semiconductor giant Micron has had sales of its chips temporarily banned in China by one of the country's courts.

As such, Micron may drop further as the downward pressure from two cycles converge, possibly into October.

The patent ruling Tuesday in favor of Micron's rivals comes as US accusations of intellectual-property theft by Chinese businesses and tariff threats increase tensions between Washington and Beijing.

As China accounted for about 50 percent of Micron's revenue in 2017, the ruling sent Micron shares plunging by 5.5 percent on Wall Street overnight.

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The lawsuit followed Micron's complaint in December against Chinese government-backed Fujian and UMC in a California court alleging misappropriation of its trade secrets and other misconduct. Since the fourth fiscal quarter is underway, Micron anticipates that the negative impact to revenue this quarter relating to the injunction will be approximately 1%, and the company continues to expect revenue to be within the previously guided range of $8.0 to $8.4 billion.

Micron is the world's fourth-biggest semiconductor supplier by sales revenue following South Korean firms Samsung and SK Hynix and U.S. chip giant Intel.

"I think that China is using this case as a payback against the US", said Ho in an interview with the Taiwan branch of New York-based broadcaster New Tang Dynasty Television.

Commenting on the decision, co-president of UMC Jason Wang, said: "UMC is pleased with today's decision".

China is the largest importer of memory products, consuming 20 percent of the world's DRAM, as it has yet to build up its nascent chip industry. Its other top markets, the United States (about 13 percent) and Taiwan (about 12 percent), make up a much smaller share.

The Chinese ban on Micron targeted its products sold through retail outlets and represented only a small portion of the chipmaker's revenue.

It also resells flash memory products purchased from other suppliers. Because China cannot replace Micron's supply of chips with its own domestically produced chips, this could ultimately lead to a reversal of the court's ban, according to an unnamed official in South Korea's semiconductor industry, in an interview with South Korean news portal Business Korea.

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