UMC cooperation with Jinhua unchanged despite U.S. restrictions

2018/10/30 16:42:19 fontsize-small fontsize-default fontsize-big
UMC cooperation with Jinhua unchanged despite U.S. restrictions

Taipei, Oct. 30 (CNA) United Microelectronics Corp. (UMC), the second-largest contract chipmaker in Taiwan, said Tuesday that its cooperation with China's Fujian Jinhua Integrated Circuit Co. remains unchanged, even though the U.S. has imposed restrictions in exports to the Chinese firm.

UMC said its cooperation with Jinhua remains intact and that both sides will continue to develop new technology despite the U.S. move to restrict U.S. firms from doing business with the Chinese firm.

UMC made the remarks after the U.S. Department of Commerce (DOC) announced a day earlier that it has taken action to restrict technology exports to the Chinese IC firm, since the company "poses a significant risk of becoming involved in activities that are contrary to the national security interests of the United States."

From May 2016, Jinhua has entrusted UMC to develop DRAM technology. While UMC uses Jinhua's DRAM production equipment, the Chinese firm pays the Taiwanese partner for technology development.

UMC said the restrictions imposed by Washington on Jinhua do not affect the partnership between the two.

According to the DOC, the restrictions imposed on Jinhua requires U.S. firms to own a license to export components, software and technology to the Chinese counterpart.

"Jinhua is nearing completion of substantial production capacity for DRAM integrated circuits," the DOC said. "The additional production, in light of the likely U.S.-origin technology, threatens the long-term economic viability of U.S. suppliers of these essential components of U.S. military systems."

The restrictions are similar to an earlier move by Washington to restrict exports to Chinese telecommunications equipment company ZTE earlier this year to cut it off from U.S. suppliers. ZTE was allowed later to resume purchases of U.S. products due to a settlement to pay a US$1 billion fine.

Last December, Jinhua and UMC were accused by U.S. memory chip maker Micron Technology Inc. of stealing its chip designs through poached employees and a lawsuit remains under way in a California court.

UMC filed a countersuit in a Chinese court, accusing Micron of infringing on its patents and received a court decision in favor of the Taiwanese firm in July. The ruling imposes a temporary ban on sales of Micron's main products in the China market.

(By Chang Chien-chung and Frances Huang
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