Taiwain’s UMC pleads guilty to Micron IP theft

Taiwan-based UMC (United Microelectronics Corp.) has pleaded guilty in a San Francisco court to trade secret theft from Micron and will pay a $60m fine. 

Prosecutors dropped charges of economic espionage and conspiracy in exchange for the guilty plea, fine, and “assistance with the investigation and prosecution of its co-defendant, Fujian Jinhua, a Chinese state-owned-enterprise.

US Deputy Attorney General Jeffrey Rosen said: “UMC stole the trade secrets of an American leader [Micron Technology] in computer memory to enable China to achieve a strategic priority: self-sufficiency in computer memory production without spending its own time or money to earn it.”

Micron sued China’s Fujian Jinhua in 2017, alleging it used Micron’s DRAM manufacturing intellectual property (IP) obtained illegally by UMC. The US DoJ got involved in 2018, accusing UMC of stealing intellectual property from a Micron subsidiary in Taiwan, and supplying this to Fujian Jinhua.

A statement from Stan Hung, Chairman of the Board of UMC, said: “UMC takes full responsibility for the actions of its employees, and we are pleased to have reached an appropriate resolution regarding this matter.”

David Anderson, a US attorney for the northern district of California, told the Financial Times that “UMC’s guilty plea points this case towards trial against Fujian Jinhua in 2021.” 

Thanks for the memories 

UMC is the world’s fourth biggest contract semiconductor manufacturer world-wide. In May 2016 it signed a deal with Fujian Jinhua to jointly develop two generations of DRAM process technology, similar to technology that had been in mass production since at least 2012.

The first-generation DRAM process technology was transferred by UMC to Fujian Jinhua in September 2018.

UMC recruited engineers from various companies, including Micron Memory Taiwan, Co. (MMT). Two former MMT employees brought with them confidential and alleged trade secret materials from former employers. They were used in the first generation DRAM project. A third former-MMT employee was also involved in this DRAM IP transfer.

In the face of a joint barrage from Micron and the US DoJ, UMC began to unwind its DRAM project in January 2019.