Taiwan’s UMC Pleads Guilty, Fined $60 Million in Trade-Secret Theft Case

October 29, 2020 Updated: October 29, 2020

WASHINGTON/SHANGHAI—Taiwan’s UMC has pleaded guilty to trade-secret theft in the United States and will pay a $60 million fine in a case in which it was accused of helping a Chinese state-owned chipmaker steal secrets from Micron Technology Inc.

The fine is the second-largest ever in a criminal trade-secret prosecution, the U.S. Department of Justice (DOJ) stated.

UMC, formally known as United Microelectronics Corp., China’s Fujian Jinhua Integrated Circuit Co., and three individuals were indicted in 2018 for conspiracy to steal trade secrets from Micron.

As part of the agreement, the DOJ will dismiss allegations against UMC, including conspiracy to commit economic espionage, as well as a related civil case. The company, which also is subject to a three-year term of non-supervised probation, agreed to cooperate with the U.S. government in the investigation and prosecution of Fujian Jinhua.

“UMC stole the trade secrets of an American leader in computer memory to enable China to achieve a strategic priority: self-sufficiency in computer memory production without spending its own time or money to earn it,” Deputy Attorney General Jeffrey A. Rosen said in a statement.

UMC said in a statement that its management was unaware of and didn’t authorize actions taken by three of its employees who had previously worked for Micron.

One of the employees input trade secret information from Micron into an early draft of UMC’s design rules for a DRAM project it was working on with Fujian Jinhua, it said.

UMC added it never planned to, and didn’t transfer Micron trade secrets or any unauthorized third-party information to Fujian Jinhua.

The United States alleges Fujian Jinhua used the trade secrets in its memory chip designs. Its indictment against the state-owned firm remains unresolved.

Fujian has previously denied wrongdoing. Reuters was unable to reach a company representative by phone or fax on Oct. 29 for comment.

In late 2018, the U.S Department of Commerce added Fujian Jinhua to its so-called Entity List, in effect barring U.S. suppliers from selling to it. The company has since halted chip production plans, analysts have said.

By Lisa Lambert, Kanishka Singh, and Josh Horwitz