Published: Fri, November 02, 2018
Markets | By Otis Pena

US accuses China, Taiwan firms of stealing secrets from chip giant Micron

US accuses China, Taiwan firms of stealing secrets from chip giant Micron

US Attorney General Jeff Sessions announced charges Thursday against Chinese and Taiwan companies for theft of business secrets from US chip giant Micron.

Along with the two companies, three individuals were charged with a conspiracy to commit economic espionage, among other crimes to steal trade secrets from Micron Technology, Inc., which specializes in developing and manufacturing memory products such as dynamic random-access memory, the Justice Department said.

"Chinese economic espionage against the United States has been increasing - and it has been increasing rapidly", Sessions said.

Sessions said the Taiwanese company partnered with a Chinese state-owned firm so that ultimately China could steal this technology and use it to compete against the US.

During his time at UMC Chen recruited MMT employees, including fellow defendants He Jianting, aka J.T. Ho, and Wang Yungming, aka Kenny Wang who allegedly stole Micron trade secrets related to DRAM manufacturing and design for UMC. Wang's acts were most bold, as he allegedly misappropriated 900 Micron files and stole F32nm DRAM trade secrets from USA servers and stored it on his Google Drive account.

"The Chinese government's complicity in intellectual property theft hurts American manufacturers, workers, and consumers, and undermines the ability of US businesses to operate in China", Senator Mark Warner of Virginia, the vice chairman of the Senate Select Committee on Intelligence, said in an emailed statement.

China-US trade tensions have erupted in tit-for-tat tariffs between the world's two biggest economies this year. Those trade secrets were worth "hundreds of millions, perhaps billions of dollars", Alex Tse, the acting United States attorney for northern California, said.

The Justice program is part of a multi-pronged Trump administration policy of taking action against China for unfair trade practices and technology theft. The Trump administration has imposed $250 billion in tariffs on Chinese products, triggering retaliatory measures from Beijing.

On the Micron case, Sessions said the company is worth an estimated $100 billion and controls up to 25 percent of the DRAM industry and noted China did not have DRAM technology until very recently.

China factory activity slows in October amid trade war woes
The monthly measure for new orders tumbled 1.2 points to 50.8, according to NBS and the logistics federation. Washington, Europe and other trading partners say those plans violate Beijing's market-opening obligations.

Trump said on Twitter Thursday that he spoke by phone with Chinese President Xi Jinping and discussed many topics "with a heavy emphasis on trade".

The Justice Department has charged a Chinese firm controlled by its government with the theft of semiconductor technology trade secrets worth almost $9 billion. He said the government is launching a new initiative to crack down on Chinese espionage trade cases.

Sessions said the department's National Security Division, led by John Demers, along with the Federal Bureau of Investigation and a group of U.S. Attorneys will step up enforcement. Wang downloaded over 900 Micron confidential and proprietary files before he left MMT and stored them on USB external hard drives or in personal cloud storage, from where he could access the technology while working at UMC.

Additionally, the initiative will expand national security reviews of Chinese investments and purchases in the United States and foreign agents' registration.

FBI Director Christopher Wray said China poses the most significant threat to the United States.

Both companies are also embroiled in a civil lawsuit from the justice department, which seeks to block them from exporting any goods created from these stolen secrets.

Accusations that China unfairly acquires technology are at the heart of escalating U.S.

The indictment was filed on September 27, and unsealed on Thursday.

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