UMC's case involving Micron's trade secrets has made new progress, with a fine of NT$20 million in the second trial

In 2017, Micron accused three former employees of stealing its technology when they joined UMC, and the Taichung District Prosecutor's Office filed a lawsuit against the relevant employees and UMC. On the afternoon of June 12, 2020, the Taichung District Court pronounced a verdict on Micron's lawsuit against UMC for stealing trade secrets. He Jianting was sentenced to 5 years and 6 months in prison and fined NT$5 million; Wang Yongming was sentenced to 4 years and 6 months and fined NT$4 million; UMC Assistant Manager Rong Letian was sentenced to 6 years and 6 months in prison and fined NT$6 million; UMC was fined NT$100 million, but can still appeal to the Intellectual Property Court.

Now the case has ushered in new progress, and the second trial fined NT$20 million

According to Taiwan media "Juheng.com", the second instance of the Taiwan Intellectual Property and Commercial Court today (27) revoked the original judgment of the Taichung District Court and sentenced UMC to a fine of NT$20 million and suspended sentence for 2 years. In addition, the UMC employee Rong Letian was sentenced to not guilty and the prosecution was not accepted, and He Jianting and Wang Yongming were sentenced to 1 year and 6 months in prison respectively, both of whom were suspended. As early as 2017, Micron sued UMC in Taiwan, accusing employees who jumped from Micron to UMC of stealing Micron's DRAM trade secrets. Later, Micron claimed that UMC stole its intellectual property through Micron's employees in Taiwan. UMC and Fujian Jinhua have been defending the case.

The investigation into Chen Zhengkun, former general manager of Fujian Jinhua, has not yet reached a final conclusion.

UMC said it deeply hopes that prosecutors will respect the appellate court's decision and that UMC and Micron will reach a global settlement in November 2021 to bring the case to an end.

UMC emphasized that while providing competitive products and services in various fields, it will continue to implement and optimize policies and measures on the protection and prevention of trade secrets, and will continue to do its best to develop its core business of wafer foundry in order to gain a foothold in the fiercely competitive global semiconductor market and make positive contributions to the technological and economic development of Taiwan, China.

It is reported that this case can be traced back to the cooperation between UMC and Fujian Jinhua.

In February 2016, Fujian Electronic Information Group, Jinjiang Energy Investment Group Co., Ltd. and others jointly invested and established Fujian Jinhua Electronics, a DRAM chip manufacturing company, through technical cooperation with UMC. Specifically, Fujian Jinhua invested and commissioned UMC to develop DRAM-related technologies. According to public information, Jinhua provided $300 million in funds to purchase R&D equipment, and paid UMC $400 million in installments according to progress. The developed technical achievements are shared by both parties. After the overall technology is completed, it will be transferred to Jinhua for mass production.

In February 2017, Chen Zhengkun, senior vice president of UMC, was appointed as general manager of Jinhua Integrated Circuit. However, in September 2017, Micron sued UMC in Taiwan, accusing employees who jumped from Micron to UMC of stealing Micron's DRAM trade secrets and allegedly leaking Micron's DRAM technology to UMC to help UMC develop 32nm DRAM.

In December 2017, Micron sued Jinhua and UMC in a federal court in California, claiming that UMC stole its intellectual property, including key technologies for memory chips, through Micron's employees in Taiwan and delivered them to Fujian Jinhua.

On January 19, 2018, Jinhua filed a lawsuit against Micron for infringement of a series of Micron's products sold in China, and submitted a complaint to the Fuzhou Intermediate People's Court on the same day, requesting that Micron immediately stop infringing Jinhua's patents and requesting compensation of RMB 196 million.

On July 3, 2018, the Fuzhou Intermediate People's Court ruled that Micron Semiconductor Sales (Shanghai) Co., Ltd. should immediately stop selling and importing more than ten Crucial solid-state drives, memory sticks and related chips, and delete the promotional advertisements, purchase links and other information about the above products on its website. At the same time, it was ruled that Micron Semiconductor (Xi'an) Co., Ltd. should immediately stop manufacturing, selling and importing several memory stick products.

On October 19, 2018, Chen Zhengkun, general manager of Jinhua Integrated Circuit, entered the country from Taoyuan Airport and received a subpoena from the U.S. federal court handed over by officials from Taiwan’s Ministry of Justice on behalf of the U.S. Department of Justice.

On October 30, 2018 (October 29, US time), the US Department of Commerce announced that it would implement export controls on Jinhua Integrated Circuits from October 30 on the grounds of national security, and Chinese companies were included in the US export control "Entity List". At the same time, UMC stated that its cooperation plan with Jinhua Integrated Circuits would not be affected and it would continue to develop technology according to the contract.

On October 31, 2018, UMC announced that it had received a letter from the Bureau of International Trade forwarded by the Taiwan Electrical and Electronic Industry Association, hoping that UMC would comply with the US Department of Commerce's request to put controls above the Jinhua contract. After evaluation, UMC's senior management decided to suspend cooperation with Jinhua Integrated Circuit and negotiate with Jinhua Integrated Circuit for follow-up cooperation matters after the whole matter is settled.

On November 1, 2018, the U.S. Attorney's Office for the Northern District of California filed a criminal lawsuit against Jinhua Integrated Circuit and UMC for conspiracy to steal Micron's trade secrets. The indictment named three Taiwanese men involved in the case, namely Chen Zhengkun, He Jianting (transliteration), and Wang Yungming (transliteration). All three of them had worked for Micron and were suspected of stealing Micron's technology when they joined UMC.

On November 3, 2018, Fujian Jinhua issued a statement in response, saying that there was no behavior of stealing technology from other companies.

At the end of January 2019, UMC announced its withdrawal from the Fujian Jinhua DRAM project and recognized a loss of US$23 million in expenses.

The Taiwan court’s verdict was a lawsuit filed by Micron against UMC and its employees in Taiwan in September 2017. UMC’s defeat in Taiwan may also have an adverse impact on Micron’s lawsuit against UMC and Jinhua in the United States.

According to Taiwan Economic Daily, UMC said it will appeal the guilty verdict made by the Taichung District Court on June 12 in the case of Micron suing UMC and others for stealing trade secrets. UMC emphasized that it did not violate the Trade Secrets Act and will appeal the guilty verdict and high fine in accordance with the law.