China state-owned company charged with micron secrets theft

Hannah Rogers
November 4, 2018

The United States has charged a government-controlled company in China with stealing trade secrets from an American semiconductor company, the Justice Department said Thursday as it outlined an initiative focused on what officials said was the growing threat of Chinese economic espionage.

The Register reports that the U.S. Attorney General, Jeff Sessions, has called the indictments part of a larger DOJ push to penalize China for unethical business practices and regular attempts of theft and industrial espionage targeting U.S. businesses.

The company noted that the three former Micron employees named in the indictment are former Micron Memory Taiwan chairman Stephen Chen and engineers JT Ho and Kenny Wang.

The Justice Department said Thursday that prior to allegedly stealing from Micron, China did not possess DRAM technology-one that the Chinese Central Government said was a "national economic priority".

The Chinese government, Sessions said, was "notorious around the world" for intellectual property theft. On Monday, the US Commerce Department said it would block Jinhua from buying American components because it posed a risk to national security.

The accused individuals face up to 15 years in prison and $5 million in fines, while the companies could incur up to $20 billion in financial penalties, Sessions added.

The trade secrets are worth up to $8.75 billion, the department said.

In December 2017, Micron filed a civil case against UMC and Jinhua in the U.S. District Court for the Northern District of California for the misappropriation of Micron trade secrets.

Sessions said the case was the latest in a series that are part of a state-backed program by Beijing to steal USA industrial and commercial secrets.

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The Justice China Initiative is headed by the department's national security chief, Assistant Attorney General John Demers and will be made up of a senior Federal Bureau of Investigation official and five USA attorneys and other senior officials.

China said on Friday the United States should present evidence to back up its charges.

Mr Trump has also accused China of meddling in USA elections because of his efforts to challenge them on trade. Sessions said the Justice Department will work with Treasury on further developing those regulations.

He became the president of a Taiwanese branch under Micron, resigned in 2015 and brought trade secrets over to UMC and Fujian Jinhua, prosecutors said.

The Justice Department also will target Chinese threats to USA companies that provide components for sensitive technologies, especially those in the telecommunications sector as it readies for the transition to 5G networks.

US President Donald Trump has cited China's alleged theft of US technological know-how among a litany of grievances in his trade war with the Asian power. It wants to keep working with China without sharing key technologies. The grand-jury indictments were announced on November 1, along with an initiative to counter what the agency called a growing threat of industrial espionage led by the Chinese government.

The Justice Department's announcement Thursday comes on the heels of several other major Chinese espionage cases in recent months.

The FBI's deputy director, David Bowdich, said that almost every one of the agency's 56 field offices "has investigations into economic espionage that lead back to the country of China". The U.S. has taken an increasingly tough and confrontational stance toward what it characterizes as China's "predatory" economic policies.

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