On December 24, 2023, media reported that the U.S. storage chip company Micron Technology (Micron) has reached a settlement with Fujian Jinhua Integrated Circuit Co., Ltd. (hereinafter referred to as Fujian Jinhua) over the previous high-profile trade secret and series of patent lawsuits. The two sides will withdraw their accusations against each other globally and end all lawsuits between them. The specific settlement terms of the two sides are still unknown.

Thus, this six-year-long intellectual property dispute between Chinese and American storage chip companies has come to an end, but Fujian Jinhua has not yet publicly responded to the matter.

A six-year memory theft case triggered by a job-hopping?

It is reported that the patent dispute between the two sides started in 2016. At that time, Fujian Jinhua signed a technical cooperation agreement with Taiwan-based United Microelectronics Corporation (hereinafter referred to as UMC), entrusting UMC to develop 32-nanometer DRAM (dynamic random access memory) related technology. The technological achievements developed were shared by both parties, and after the completion of the overall technology, they were transferred to Fujian Jinhua for mass production. After the agreement was signed, three executives from Micron resigned and joined UMC, triggering a cloud of suspicion over trade secrets.

Subsequently, in September 2017, Micron sued UMC in Taiwan, accusing the employees who jumped from Micron to UMC of stealing Micron’s trade secrets, suspected of leaking Micron’s technology to UMC. In December of the same year, Micron also sued Fujian Jinhua and UMC in the United States, claiming that UMC obtained intellectual property rights through Micron’s Taiwan employees, including storage chip technology, and delivered it to Fujian Jinhua.

In January 2018, Fujian Jinhua sued Micron’s Crucial MX300 2.5-inch SSD 525GB solid state drive and Crucial DDR4 2133 8G notebook memory stick for infringing Jinhua’s patents in the Fuzhou Intermediate People’s Court, and claimed 196 million yuan in compensation.

Three-party lawsuit, Micron and UMC settle first

After Micron and Fujian Jinhua started to sue each other, the courts and relevant agencies also successively issued the results of some of the cases. Later, in this intellectual property case of three-party enterprises, Micron and UMC reached a settlement in the first two years.

In July 2018, the Fuzhou Intermediate Court ruled that Micron Semiconductor Sales (Shanghai) Co., Ltd. immediately stop selling, importing more than ten models of Crucial brand solid state drives, memory sticks and related chips, and delete its website’s promotional advertisements, purchase links and other information about the above products, and also ruled that Micron Semiconductor (Xi’an) Co., Ltd. immediately stop manufacturing, selling, importing several models of memory stick products.

In October 2018, the U.S. Department of Commerce announced that it would impose export controls on Fujian Jinhua for national security reasons and put it on the export control “entity list”. Subsequently, Jinhua said that it had hired a professional agency to assist it in legal affairs, lobbying, public relations and other work in the United States, and jointly strive to remove Jinhua from the U.S. Department of Commerce’s export control entity list.

In October 2020, UMC announced that the U.S. District Court for the Northern District of California had approved the settlement agreement between UMC and the U.S. Department of Justice, and the U.S. Department of Justice would withdraw the charges against UMC. UMC admitted to infringing one trade secret and agreed to pay a fine of $60 million. In November 2021, UMC reached a settlement agreement with Micron first, and the two sides withdrew their lawsuits against each other, and UMC paid Micron a one-time settlement fee of undisclosed amount. However, at this time, the lawsuit between Micron and Fujian Jinhua was not resolved, until two years later, the two sides ended this six-year-long intellectual property lawsuit.

According to media reports, about 25% of Micron’s global revenue comes from the Chinese market. Since 2023, Micron has tried to repair its relations with China. In June, Micron announced that it would increase its investment in China, planning to invest more than 4.3 billion yuan in its factory in Xi’an in the next few years.

However, Micron’s business activities in China also face some challenges. In May 2023, the Cyberspace Administration of China issued a notice that Micron’s products have serious hidden dangers of network security, posing a major security risk to the supply chain of China’s key information infrastructure, affecting China’s national security. Therefore, the Office of Cybersecurity Review made a decision not to pass the cybersecurity review according to law. The operators of key information infrastructure in China should stop purchasing Micron products.