Micron says has not received Chinese injunction on chip sales

Micron says has not received Chinese injunction on chip sales

US flash memory chip maker Micron Technology Inc. saw its share price take a pummeling today on the news that a Chinese court has temporarily banned it from doing business in that country. "(Jinhua) dated July 3", the chipmaker said in a statement.

Shares in the sector had been shaken on Tuesday by the first reports of the ruling, which added to a growing list of intellectual property disputes between Washington and China in the technology sector.

United Microelectronics Corporation (UMC) filed a lawsuit against Micron Technology subsidiaries in China for patent infringements in January 2018, and demanded a compensation of RMB 270 million (USD 40.7 million).

Micron said it had not been served with the injunction and would not comment further until it had reviewed documentation from the Chinese court, according to Reuters. Last December, Micron filed a lawsuit against UMC in the Northern District Court of California of the USA, claiming that UMC violated intellectual property rights by copying its memory patents and trade secrets. Note from UMC Concerning Forward-Looking Statements Some of the statements in the foregoing announcement are forward looking within the meaning of the U.S. Federal Securities laws, including statements about future outsourcing, wafer capacity, technologies, business relationships and market conditions.

The dispute follows a ban on US firms supplying parts to China's telecom equipment maker ZTE as well as the drawn-out wait for Chinese regulators to approve Qualcomm Inc's $44 billion takeover of NXP Semiconductors.

"It certainly appears semiconductors could move to the prime-time in negotiations between the Trump Administration and China", Evercore ISI analyst C.J. Muse said.

Beijing is holding up U.S. chipmaker Qualcomm's proposed $44 billion takeover of NXP Semiconductors. The Chinese government has poured billions of dollars into shifting the balance of power.

Other semiconductor shares suffered as well on the news as the battle between Micron and China is considered a bellwether amidst a trade fight between Beijing and Washington, and China's attempt to gain advanced chip tech and knowledge. However, the Chinese court did not informed Micron of the decision to prohibit production and sale of by Micron, but the story was leaked from UMC, a competitor of Micron.

It also comes as China investigates Micron and its South Korean rivals over price-fixing allegations, amid a surge in prices of dynamic random access memory (DRAM) chips.

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.

The Micron ban could be a major opportunity for other global chipmakers to step in.