China blocks Micron sales amid US trade tensions, chip battle

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The firm's estimate that the ban imposed by a Chinese court in a patent infringement lawsuit would weaken quarterly revenue by just 1 percent drove its shares as much as 3.6 percent higher and lifted stocks of other US chipmakers. We strongly believe that the patents are invalid and that Micron's products do not infringe the patents.

A Chinese court has temporarily halted a USA memory chip maker from selling its semiconductor products in China, a move that could further intensify the ongoing trade dispute between Beijing and Washington.

Adding to the mess, China's government recently said it was investigating claims of price-fixing by Micron and its South Korean rivals Samsung Electronics Ltd. and SK Hynix Inc., which together make up the world's three largest flash memory companies. "Micron will not be commenting further until the company has received and reviewed documentation from the Fuzhou Intermediate People's Court of China". "The Fuzhou Court issued this preliminary ruling before allowing Micron an opportunity to present its defense", Micron's Joel Poppen, senior vice president of legal affairs and general counsel, said in a release.

The two chipmakers have been at loggerheads since December previous year when Micron filed a civil lawsuit in the state of California, accusing UMC of secret infringement of intellectual property related to its DRAM chips.

UMC, a contract chip manufacturer, plans to list its China operations on the Shanghai Stock Exchange.

Shares of UMC rose as much as 3.9% in Taipei while Micron slumped 5.5% in NY.

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Li Yiqiang, partner at law firm Faegre Baker Daniels, said normally courts set a very high bar for granting injunctions in complex patent infringement cases but the trade tensions may have given the court more leeway in this case.

UMC has not commented on the poaching allegations.

As evidence, Micron cited the use of Micron DRAM technology code names at a UMC and Jinhua recruitment fair for RAM chip experts in Silicon Valley in October 2016 and its discovery that its employees poached by UMC had copied confidential information before leaving the company.

China accounts for a quarter of the global memory chip market. "So they have to import anyway", Greg Roh, an analyst at Hyundai Motor Securities, told Reuters in an interview.

In the semiconductor industry, experts say that China pursuing the rapid growth of the Chinese semiconductor industry sided with the Chinese company.

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.