Tuesday, 20 November, 2018

Justice Department Charges Chinese Firm With Chip Tech Theft

Chinese company charged with stealing trade secrets from US chipmaker Trump administration charges Chinese companies with spying on U.S.
| 04 November, 2018, 10:34

The announcement came amid an escalating trade war between the USA and China, and growing pressure on China over its alleged theft of hundreds of billions of dollars' worth of US intellectual property.

The Register reports that the U.S. Attorney General, Jeff Sessions, has called the indictments part of a larger DOJ push to penalize China for unethical business practices and regular attempts of theft and industrial espionage targeting U.S. businesses.

US Attorney General Jeff Sessions announced the indictment, which also names three Taiwan nationals, in Washington yesterday.

The charges against Taiwan-based United Microelectronics Corp, China state-owned Fujian Jinhua Integrated Circuit Co Ltd and three individuals who once worked for a unit of Micron mark the fourth case brought by the Justice Department since September as part of a broader crackdown against alleged Chinese espionage on US companies.

The development is a continuation of a dramatic pivot by the Trump administration towards a more aggressive posture in bilateral relations with China. In the meantime, Washington is signaling that the gloves are off.

"We see it time and again: Chinese actors have stolen wind turbine technology in Wisconsin, agricultural research in Kansas, cancer drug research in Pennsylvania, and software source code in NY", said Assistant Attorney General Brian A. Benczkowski in prepared remarks at the announcement.

"China wants the fruits of America's brainpower to harvest the seeds of its planned economic dominance", Assistant Attorney General John Demers said. "It's time for China to join the community of lawful nations".

Three individuals were also charged, including a former General Manager and Chairman of Micron's Taiwanese branch, who later served as an exec at both UMC and Fujian Jinhua.

China challenged the United States Friday to show evidence to support charges that Beijing backed a scheme by Chinese and Taiwanese companies to steal trade secrets from a US-based semiconductor firm. The company has a 20- to-25 percent share of the world's supply of DRAM, prosecutors said. This week, prosecutors unveiled charges against two alleged Chinese spies for orchestrating a conspiracy to steal prized jet engine technology from private companies.


The DOJ alleges that while still at UMC, Chen reached out to two of his former Micron Taiwan employees, He Jianting and Wang Yungming, which he convinced to jump ship at UMC.

The US government claims that through these actions China is breaking worldwide fair trade agreements.

Chen later became the President of Fujian Jinhua and was put in charge of said DRAM factory, estimated at a whopping $5.7 billion.

Earlier this week, Fujian Jinhua was targeted by the U.S. Department of Commerce and placed on an export ban list.

According to the indictment, the Taiwanese nationals downloaded more than 900 confidential files from Micron.

Taiwan assisted with the investigation, according to Alex Tse, the USA attorney for northern California.

United Microelectronics issued a response saying the allegations in the indictment and complaint are "virtually the same as allegations in a civil complaint previously filed against UMC by Micron". 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.

The Commerce Department has added Jinhua to an Entity List to prevent it from buying goods and services in the U.S. to limit profitability from stolen tech.

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