USA chipmaker Micron Technology Inc said on Tuesday it had not yet received a temporary injunction banning chip sales in mainland China referred to earlier in the day by Taiwan-based competitor United Microelectronics Corp. Washington says the measures are a response to intellectual property theft by China.
However, sources close to the company say it is now drafting a response to the ruling by the Fuzhou Intermediate People's Court of the People's Republic of China. When violations occur, UMC stands ready pursue patent infringement litigation in order to obtain judgment and remedies to protect the intellectual property rights of the company.
China's aim may not be to bar shipments of Micron's chips, instead the ruling may be part of a strategy to push it into a partnership with Chinese semiconductor makers, which could speed up the country's internal chip industry development, according to Stifel Nicolaus analyst Kevin Cassidy. The Taiwanese chipmaker was retaliating against Micron's accusation that UMC stole chip technology and gave it to its Chinese partner, Micron said.
Micron said it expects quarterly revenue to be within the previously guided range of $8.0 billion to $8.4 billion.
"UMC's move to deepen ties with China and the eagerness to join the Chinese chip ecosystem could definitely help it leverage more resources and gain business interests from the nation when many emerging Chinese chip providers still need technical support from Taiwan", said Liu. The patents are not used in Micron's DRAM and NAND technology or products, and UMC and Jinhua rely on distorted interpretations of the patents and improper evidence to support their false allegations that Micron infringes the patents.
UMC declined to provide a copy of the court's decision. Micron will continue to aggressively defend against these unfounded patent infringement claims while continuing to work closely with its customers and partners.
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On the demand front, Chinese domestic market is expected to consume around 26% of the DRAM bit output of Micron, and 20% of global DRAM bit output in 2018 as China remains the world's second-largest economy.
The stock is responding favorably, up $1.79, or 3.5%, at $53.27, in early trading.
Analysts said the ruling would bolster Micron's well-established rivals.
Shares of Micron, which generated half of its $20.3 billion fiscal 2017 revenue from China, closed down 5.5 percent on Tuesday at $51.48.