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Chinese Chipmaker to Appeal U.S. Ban Over Alleged Secrets Theft

Bloomberg News

(Bloomberg) -- Fujian Jinhua Integrated Circuit Co., the Chinese chipmaker accused of stealing American trade secrets, plans to appeal a U.S. block on technology exports that’s frozen its business.

The state-owned memory chipmaker was charged in November along with Taiwanese partner United Microelectronics Corp. of conspiring to steal intellectual property from Micron Technology Inc. Both companies have since denied the allegations, and on Friday Jinhua challenged U.S. authorities to produce proof of the supposed transgressions.

Jinhua was wrapping up construction of a $6 billion plant on China’s southeastern coast when the Trump administration barred American suppliers from selling products or providing technical support to the Chinese company last October. Those restrictions emerged as China’s alleged theft of American technology became one of the thorniest topics in delicate trade negotiations.

“In the following months, Jinhua is willing to clarify that it doesn’t pose a threat to the national security of the U.S.,” it said in a statement posted on the corporate website. “The company has abided by U.S. law since the beginning.”

Jinhua is one of three domestic memory chipmakers tasked with helping China reduce a reliance on some $200 billion of annual semiconductor imports -- about as much as it spends on importing oil. Its indictment was the first under the Justice Department’s “China Initiative,” announced in November to prioritize trade-theft cases and litigate them quickly.

It stemmed in part from a lawsuit Micron filed against Jinhua and UMC in 2017. The U.S. memory giant accused the pair of stealing its proprietary technology, while UMC also filed a lawsuit claiming Micron infringed on its own patents. In July, a Chinese court suspended some Micron chip sales in the country, though the American company has said that moratorium affected just 1 percent of its annual revenue.

To contact Bloomberg News staff for this story: Gao Yuan in Beijing at ygao199@bloomberg.net

To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Edwin Chan, Reed Stevenson

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