July 3, 2018 / 5:17 PM / 17 days ago

China court bans Micron chip sales in patent case: Taiwan's UMC

TAIPEI (Reuters) - A Chinese court has temporarily barred Micron Technology Inc from selling 26 chip products in the mainland in a ruling over a patent infringement case with Taiwan’s United Microelectronics Corp (UMC), UMC said.

Memory chip parts of U.S. memory chip maker MicronTechnology are pictured at their booth at an industrial fair in Frankfurt, Germany, July 14, 2015. REUTERS/Kai Pfaffenbach

The ruling, which hit shares of Idaho-based Micron and other U.S. chipmakers on Tuesday, comes amid an escalating trade spat between Washington and Beijing over tariffs.

It also comes as China investigates Micron and its South Korean rivals over price fixing allegations, amid a surge in prices of dynamic random access memory (DRAM) chips.

FILE PHOTO: The logo of U.S. memory chip maker MicronTechnology is pictured at their booth at an industrial fair in Frankfurt, Germany, July 14, 2015. REUTERS/Kai Pfaffenbach/File Photo

The Fuzhou Intermediate People’s Court issued a preliminary sales injunction against Micron that prevents it from selling the chips, including DRAM chips and NAND flash memory chips, in China, UMC said in a statement late on Tuesday.

Micron, which gets a chunk of its revenues from China, said it had not been served with the injunction and would not comment further until it had reviewed documentation from the Chinese court.

The two chipmakers have been at loggerheads since December when Micron filed a civil lawsuit in the state of California, accusing UMC of secret infringement of intellectual property related to its DRAM chips. In January, UMC filed a patent infringement lawsuit against Micron in China.

Micron shares closed down 5.5 percent at $51.48, while Nvidia finished 2 percent lower. Intel Corp and Broadcom Inc closed down 1 percent.

UMC shares rose more than 3 percent in early trading on Wednesday.

Reporting by Jessica Macy Yu in TAIPEI and Sonam Rai in BENGALURU; Editing by Arun Koyyur and Muralikumar Anantharaman

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