A Chinese court has temporarily barred Micron Technology Inc MU.O from selling 26 semiconductor products in the world's biggest memory chip market, citing violation of patents held by Taiwan's United Microelectronics Corp (UMC) 2303.TW .
"Micron has not been served with the preliminary injunction referred to in the statements issued by United Microelectronics Corporation and Fujian Jinhua Integrated Circuit Co. dated July 3", it said in a statement.
In December, Micron introduced a lawsuit in United States District Court for the Northern District of California that accused UMC of stealing trade secrets and giving the technology to Jinhua.
"The Fuzhou Court issued this preliminary ruling before allowing Micron an opportunity to present its defense", said Joel Poppen, Micron's general counsel.
Beijing has made the semiconductor sector a key priority under its "Made in China 2025" strategy, which has shifted up a gear after a USA ban on sales to Chinese phone maker ZTE Corp (000063.SZ) underscored China's lack of domestic chips.
Other semiconductor shares suffered as well on the news as the battle between Micron and China is considered a bellwether amidst a trade fight between Beijing and Washington, and China's attempt to gain advanced chip tech and knowledge. Micro said it had not received confirmation of the move.
Several Chinese government-backed entities have poured billions into research and for buying companies with a trove of chip patents.
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Fujian Jinhua also issued a statement on Tuesday saying the court had ruled against Micron. "Near-term this could favor non-US chipmakers vs".
UMC announced that it has secured an injunction against the sale of certain Micron Technology products in China as part of a patent infringement suit.
UMC, a foundry that does not make mainstream memory products, has not commented on the poaching allegations and the case is still being heard.
Analysts believe the ban is largely symbolic as hurting the US chipmaker would end up creating more pain for local Chinese firms who would have to rely on Korean firms Samsung Electronics and SK Hynix, pushing up memory chip prices. Shares of Micron fell 5.5% after the news broke on Tuesday.
However, today Micron reiterated its quarterly sales guidance, emphasizing that the injunction would only impact its overall sales by 1%.
It also resells flash memory products purchased from other suppliers.
In Taipei, shares of Nanya Technology Corp., a close business partner of Micron, had fallen 0.61 percent to NT$81.30 as of 11:42 a.m., Wednesday.