Image source: Visual China
days ago (July 3), the Fuzhou Intermediate People's Court ruled to issue an "in-suit injunction" against the US chip giant Micron Technology (MU, NASDAQ). Some of its flash memory SSDs and memory sticks DRAM will be temporarily banned. Sold in China. Affected by this, Micron Technology's stock price fell by 5.51% that day, and U.S. chip stocks such as Qualcomm, NXP , Intel , and Broadcom fell across the board.
On July 4, Foreign Ministry spokesperson Lu Kang stated at a regular press conference that this should be a commercial case related to intellectual property protection. As for whether this is related to the Sino-US trade friction, he believes that there is no necessary connection between the two.
Public information shows that as of mid-2017, Samsung , Micron Technology and Hynix accounted for 96% of the global DRAM chip market share. Song Qinghui, a well-known economist, told the "Daily Economic News" reporter that nearly half of Micron Technology's revenue comes from China, and some of its products are prohibited from being sold in China, which will have a certain impact on the company's business development. At the same time, this incident may have an impact on its customers in China.
Xiong Haifeng, president of Shanghai Yixin Communication Technology Co., Ltd., believes that this ruling reflects that domestic companies have the ability and are seeking to carry some technologies in the chip industry.
is not the final result of the lawsuit
On July 3, the plaintiffs Fujian Jinhua Integrated Circuit Co., Ltd. (hereinafter referred to as Fujian Jinhua) and Taiwan Lianhua Electronics Co., Ltd. (hereinafter referred to as Taiwan UMC ) announced on their official websites that Fuzhou The Municipal Intermediate People's Court ruled that Micron Semiconductor Sales (Shanghai) Co., Ltd. (hereinafter referred to as Micron Shanghai) immediately stopped selling and importing more than ten Crucial Crucial solid-state drives, memory sticks and related chips, and deleted the information about the above products from its website. Promotional advertisements, purchase links and other information. At the same time, it was ruled that Micron Semiconductor (Xi’an) Co., Ltd. (hereinafter referred to as Micron Xi’an) immediately stopped manufacturing, selling, and importing several memory stick products.
In the statement, Fujian Jinhua said that the company had previously filed a lawsuit against Micron's own brand Crucial MX300 2.5-inch SSD 525GB solid state drive and Crucial DDR4 2133 8G notebook memory module. Subsequently, detailed and rigorous analysis was continued in the industry's authoritative advanced laboratory, and it was discovered that more than ten of Micron's own-brand products were suspected of infringing on the company's patents, including several DDR4 notebook and desktop memory modules, and the MX500 series. 2TB, 1TB, 500GB, 250GB 2.5-inch solid-state drives and related infringing chips will be compared one by one with the technical features claimed by Jinhua to determine that the technical solutions of these products fall within Jinhua’s patents the scope of protection required.
Fujian Jinhua also emphasized: "Micron's infringement is unscrupulous" and "Micron has caused irreparable harm to Jinhua." The co-president of UMC Taiwan said in its official statement that UMC Taiwan welcomes the court’s ruling. Taiwan UMC has invested heavily in intellectual property rights and will fully pursue liability for companies that damage intellectual property rights.
On July 4, a reporter from "Daily Economic News" called Jinhua, Fujian Province to learn about the situation. Fujian Jinhua said that the company's leaders are all away on business, and the relevant litigation status and subsequent progress will be released in a timely manner on the company's official website.
In fact, the friction between the three parties has been around for a long time. On May 13, 2016, Taiwan UMC announced that it would jointly develop DRAM-related process technology with Fujian Jinhua, which once attracted considerable attention in the industry. In December 2017, Micron accused Fujian Jinhua that two of its former employees brought technical information to Fujian Jinhua after leaving their jobs. Therefore, Micron sued Fujian Jinhua in the Taiwanese court for infringement of confidentiality, and at the same time, it accused Fujian Jinhua of "failure to perform its management responsibilities well". Fujian Jinhua’s partner Taiwan UMC was simultaneously named as a defendant.
In January this year, Fujian Jinhua and Taiwan UMC also filed a patent infringement lawsuit against Micron Technology, involving four patents. After six months of trial, on July 3, the Fujian Intermediate People's Court officially ruled to issue an "injunction in litigation."
It is understood that the injunction in the lawsuit is not the final solution to the dispute, but only provides temporary protection to the applicant.Once the judgment result of the lawsuit to which it is attached conflicts with the content of the injunction in the lawsuit, then the content within the conflict between the injunction in the lawsuit and the judgment result will automatically lose effect. However, the injunction ruling in the lawsuit can be implemented immediately once it is served.
Micron’s business in China may be hit hard
So, do the defendants, Micron Shanghai and Micron Xi’an, have any objections to the above ruling? On July 4, a reporter from "Daily Economic News" tried to contact Micron. After hearing the reporter's request for an interview, Micron's Shanghai wiring staff said, "The company's legal department is on vacation this week, so no one can respond to this question." Micron staff in Xi'an told reporters: "The Xi'an company has no external business and does not accept interviews. It is only responsible for production and manufacturing."
According to Reuters , Micron issued a statement on the morning of July 4, saying, "Micron "We have not yet received the preliminary injunction mentioned in the July 3 statement from UMC Taiwan and Fujian Jinhua." Micron Technology said it would not comment until it evaluates the documents from the Fuzhou Intermediate People's Court.
It is worth noting that in Micron Technology’s latest financial report for the third quarter of fiscal year 2018, its quarterly revenue was US$7.8 billion, a year-on-year increase of 40%; net profit was US$3.8 billion, a year-on-year increase of 131%.
Among them, DRAM contributed 71% of the company's operating income. According to data disclosed in the company's 2017 annual report, its sales in China reached US$10.39 billion, accounting for 51.12%.
Xiong Haifeng told the "Daily Economic News" reporter that this incident had a great impact on the storage industry. The DRAM memory chip market is currently dominated by three companies: Samsung, Micron Technology and Hynix.
"This ruling implies that domestic companies have the ability and are seeking to carry some technologies in the chip industry." Xiong Haifeng pointed out: "In addition, the future volume of the storage market will be very large, and the possibility of domestic chip companies rising and counter-suppression in the future will be greatly enhanced. This incident is just the beginning, and the anti-containment measures of Chinese companies will not stop there. "
reporter reviewed public information and found that DRAM is the most common system memory. In addition to being used as PC memory, it is also widely used in printers, In various digital products such as digital TV. In the past two years, its price has been rising rapidly. In 2017 alone, DRAM memory prices rose by 47%, the largest increase in the past 30 years.
From the perspective of product gross profit margin, compared with PC memory, which has always been at a gross profit margin level of 30% to 40%, the gross profit margin of mobile memory used in smartphones and server memory that is more widely used has reached 50% to 60%.
According to SIA (Semiconductor Industry Association) data, as of June this year, the global semiconductor market sales have grown by more than 20% year-on-year for 13 consecutive months. Among industry segments, the growth rate of the storage industry is far ahead, with the growth rate of DRAM exceeding 50%.
In Song Qinghui’s view, it is an exaggeration to say that this incident was a counterattack by China’s semiconductor industry. As far as he knows, the DRAM technology developed by Fujian Jinhua and Taiwan UMC is at an above-average technical level in the industry and will not pose a threat to memory giants such as Micron Technology for the time being.
From a global perspective, the United States, South Korea and other countries have invested heavily in the semiconductor field. According to statistics from the market research organization IC Insights, in 2017, about half of the top 18 companies in the global semiconductor industry with R&D investment exceeding US$1 billion were from the United States, while the combined capital investment of two Korean semiconductor companies, Samsung and Hynix, reached US$5.144 billion. .
However, China is also making efforts. IC Insights related reports show that China will invest US$11 billion in the semiconductor field in 2018, accounting for 10.6% of the world's total. In 2015, China’s capital expenditure in the semiconductor industry was only US$2.2 billion.
Song Qinghui believes that Micron’s infringement of Fujian Jinhua has not been finally recognized by the court, and domestic arrogance should not spread.
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