UMC, Fujian Jinhua indicted for alleged Micron tech theft

Glen Norman
November 4, 2018

In addition to the criminal case, the Justice Department filed a civil lawsuit seeking to prevent the two companies from exporting any products created using the trade secrets and blocking the further transfer of trade secrets.

The US Department of Justice has unveiled charges against two companies and three individuals it says have been stealing trade secrets from American memory chipmaker Micron.

"Chinese economic espionage against the United States has been increasing - and it has been increasing rapidly", he said. "We are here today to say enough is enough".

A former Micron executive went to work for the Taiwan company charged in the indictment and orchestrated the theft of Micron trade secrets valued at $8.75 billion.

The Trump administration this week imposed restrictions on technology exports to one of the indicted companies, Fujian Jinhua Integrated Circuit Co.

John Demers, the head of the Justice Department's National Security Division, said Thursday that the multi-prong approach by the government has "stopped the harm" before it could manifest itself in a competing product.

If convicted, the defendants face up to 14 years in prison and $5 million in fines. President Donald Trump has imposed tariffs on $250 billion in Chinese products in an effort to narrow the USA trade deficit with China.

"UMC regrets that the U.S. Attorney's Office brought these charges without first notifying UMC and giving it an opportunity to discuss the matter", the company said.

The United States also Thursday sued to block the transfer of trade secrets and to prevent the companies from exporting to the USA any products that they manufacturing by exploiting stolen information.

The development is a continuation of a dramatic pivot by the Trump administration towards a more aggressive posture in bilateral relations with China.

It came as Sessions also announced a new Justice Department initiative to combat Chinese economic espionage. Since the start of 2017, Sessions said, the Justice Department has charged three people with spying for China and is now prosecuting five Chinese economic espionage cases. A Justice Department spokesman said the defendants were served summonses in Taiwan and that none is in custody. Any U.S. companies found to be doing business with the Chinese chip company will face penalties, reports the Register. It wants to keep working with China without sharing key technologies.

The announcement, at which Sessions was flanked by Federal Bureau of Investigation director Cristopher Wray, came just days after the Department of Commerce banned United States firms from doing business with Jinhua - itself a severe sanction that could well put the Chinese memory chip manufacturer out of business. By some estimates, the cost to the USA economy is $30 billion annually. The U.S. has taken an increasingly confrontational stance toward what it characterizes as China's "predatory" economic policies.

"Obviously, that commitment has not been kept".

The Trump administration slapped tariffs on $200bn of Chinese imports in September, causing China to retaliate with tariffs on $60bn of USA goods.

Dmitri Alperovitch, a cyber expert and chief technology officer at the cybersecurity firm CrowdStrike, said the Chinese military curtailed its commercialhacking in 2016, but that over the previous year operatives affiliated with China's Ministry of State Security have increasingly taken up the slack, stealing military, medical, agricultural, high-tech and other secrets.

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