United States indicts Chinese, Taiwan firms for targeting Micron trade secrets

Leroy Wright
November 3, 2018

Intellectual property theft is among the Trump administration's chief complaints against China as it wages a trade war that's rattled global markets and seen the world's two largest economies slap tariffs on hundreds of billions of dollars of each other's goods.

US Attorney General Jeff Sessions announced charges Thursday against Chinese and Taiwan companies for theft of business secrets from US chip giant Micron. "We are here today to say, 'enough is enough.' We're not going to take it anymore", said Attorney General Jeff Sessions at a press conference.

The criminal defendants are United Microelectronics Corporation ("UMC"), a Taiwan semiconductor foundry; Fujian Jinhua Integrated Circuit, Co., Ltd. ("Jinhua'"), a state-owned enterprise of the PRC; and three Taiwan nationals: Chen Zhengkun, a.k.a. Stephen Chen, age 55; He Jianting, a.k.a. J.T. Ho, age 42; and Wang Yungming, a.k.a. Kenny Wang, age 44.

In August 2017, Taiwan authorities filed criminal indictments against UMC and three of its employees for the alleged theft and use of trade secrets from Micron, for the objective of developing DRAM chip manufacturing technologies in cooperation with Jinhua.

The U.S. Commerce Department earlier this week also announced that it had put Fujian Jinhua Integrated Circuit Co Ltd on a list of entities that can not buy components, software and technology goods from U.S. firms.

The announcement came amid an escalating trade war between the US and China, and growing pressure on China over its alleged theft of hundreds of billions of dollars' worth of USA intellectual property.

"Obviously, that commitment has not been met", he said.

The charges against Taiwan-based United Microelectronics Corp, China state-owned Fujian Jinhua Integrated Circuit, Co, Ltd, and three individuals mark the fourth case brought since September as part of a broader crackdown against alleged Chinese espionage on USA companies. Donald Trump has slapped tariffs on $250bn in Chinese products in an effort to narrow the U.S. trade deficit with China. While the focus has been on hackers from Russian Federation and Iran, the United States also views China as a major cybersecurity threat. Chen later became the president of Jinhua and was put in charge of the China-based firm's DRAM production facility. On Tuesday, the Justice Department also announced charges against two Chinese intelligence officers and a team of hackers for stealing sensitive commercial aviation secrets and data.

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Micron is the only US-based company that manufactures DRAM. The Justice Department will select five US attorneys to be part of the initiative.

The new DOJ initiative reflects the scale of alleged Chinese economic espionage.

The prosecution comes amid heightened trade tensions between China and the USA, and as American officials raise alarms about the threat of Chinese economic espionage.

"China is back as the most prolific nation-state actor conducting industrial espionage via cyber and non-cyber means", he said.

Chen, who is one of the three individuals facing criminal charges, then recruited other Micron employees to come and bring trade secrets with them.

"International trade has been good for China, but the cheating must stop". "It's bigger than intellectual property theft".

Almost all of the FBI's field offices across the country "have investigations into economic espionage that lead back to the country of China", FBI Deputy Director David Bowdich told reporters.

"We are committed to continuing to work closely with our federal, state, local, and private sector partners to counter this threat from China".

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