Micron, Fujian Jinhua to settle lawsuits

U.S. chip giant first filed IP complaint against the Chinese rival in 2017

U.S. chip company Micron Technology Inc has settled an intellectual property lawsuit with Chinese company Fujian Jinhua Integrated Circuit Co, which experts said can pave the way for positive development of the firms in the future.

The comments came after a Micron spokeswoman said in a statement that "the two companies will each globally dismiss their complaints against the other party and end all lawsuits between them."

Roger Sheng, vice-president of research at U.S. market research company Gartner Inc, said: "Reaching a global settlement agreement between Micron and Fujian Jinhua can create a better development environment for both companies in the future".

The move also shows that Micron is committed to the Chinese market and is making efforts to revive its business in the country, Sheng said.

Behind South Korean chip companies Samsung and SK Hynix, Micron is the world's third-largest maker of dynamic random access memory (DRAM) chips, which are flash memory semiconductors widely used in smartphones, personal computers and servers. Chinese mainland is a big market for Micron, accounting for around 11 percent of the company's $30.8 billion global sales in 2022, according to the company's financial report.

The dispute between Micron and Fujian Jinhua had been going on for years. In 2017, Micron sued Fujian Jinhua and the latter's partner United Microelectronics Corp.

In November, Sanjay Mehrotra, president and CEO of Micron, visited Beijing and met China's Minister of Commerce Wang Wentao. Wang said during the meeting that China welcomes Micron to continue to take root and deeply cultivate the Chinese market, and achieve better development while complying with Chinese laws and regulations.

Mehrotra expressed a willingness in the meeting to continue expanding investment in China.

The meeting came after Micron said in June that it would invest about 4.3 billion yuan ($600 million) in its chip packaging plant in Xi'an, Shaanxi province, as part of its long-term commitment to the Chinese market.

Micron said part of the planned investment will go toward the purchase of packaging equipment from a Xi'an-based subsidiary of Powertech Technology, which Micron has been using in the factory since 2016.

Micron said it would offer job contracts to 1,200 employees of Powertech's Xi'an subsidiary and that the investment would create an additional 500 jobs. This would bring Micron's workforce in China to more than 4,500.

Before the investment plan, the Cyberspace Administration of China said in May that products of Micron sold in China have not passed a recent cybersecurity review, and operators of the country's key information infrastructure should stop purchasing its products.

Xiang Ligang, director-general of the Information Consumption Alliance, a telecom industry association in Beijing, said the settlement is also good news for the development of China's memory chip industry, as Fujian Jinhua can be an important player in producing memory chips.

The World Semiconductor Trade Statistics expects the size of China's memory chip market will hit 650 billion yuan in 2023. In comparison, the global size of the memory chip market is expected to stand at $165.8 billion.