Taiwan's UMC admits to stealing trade secrets for Chinese company

UMC fined US$60 million for helping Chinese company steal trade secrets from US memory producer Micron

(UMC photo)

(UMC photo)

TAIPEI (Taiwan News) — A Taiwanese semiconductor company has been ordered to pay a fine of US$60 million for conspiring with a Chinese state-run company to steal trade secrets from an American semiconductor firm.

In a press release issued on Wednesday (Oct. 28), the U.S. Department of Justice (DOJ) announced that the Taiwanese semiconductor foundry United Microelectronics Corporation, Inc. (UMC, 聯華電子) had pleaded guilty to criminal theft of secrets and been fined US$60 million for conspiring with Fujian Jinhua Integrated Circuit Co., Ltd. (Fujian Jinhua, 福建晉華) to steal trade secrets from American semiconductor company Micron Technology, Inc. (Micron).

However, the DOJ will not pursue additional charges against UMC due to its cooperation in the investigation and prosecution of co-defendant Fujian Jinhua, which is a Chinese state-owned enterprise.

In 2018, the DOJ indicted UMC, Fujian Jinhua, and three individuals for conspiracy to steal, convey, and possess Micron's trade secrets regarding the manufacture of dynamic random access memory (DRAM) for the benefit of Fujian Jinhua. As part of its guilty plea, UMC will be subject to a three-year probation, cooperate with the investigation, and pay the second-largest fine in the trade secret case.

Deputy Attorney General Jeffrey A. Rosen stated that UMC's actions were carried out to give China a strategic advantage: "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."

As part of the guilty plea, UMC admitted to hiring Stephen Chen (陳正坤) and engineers J.T. Ho (何建廷), and Kenny Wang (王永銘) from Micron's Taiwan subsidiary. It made Chen senior vice president and put him in charge of a project to develop DRAM technology for Fujian Jinhua.

Chen hired Ho and Wang to participate on the DRAM development team. It was Ho and Wang who secretly stole confidential information from Micron's Taiwan subsidiary and provided it to UMC. After UMC's IT department discovered confidential data from Micron on Ho's UMC computer, Chen arranged for two "off-network" laptops the enable UMC staff to continue accessing Micron's trade secrets without further detection.

When Taiwanese authorities raided UMC's offices, Ho and Wang asked another employee to help hide the stolen information. While the search was underway, Chen was appointed president of Fujian Jinhua and began managing its memory production plant.

Ho, Wang, and another UMC engineer, Rong Le-tien (戎樂天), were charged in 2017 for violating Taiwan's Trade Secrets Act by sharing Micron's business information with Fujian Jinhua during a cooperation project with UMC. On June 12 of this year, a Taichung District Court found Ho, Wang, and Rong guilty and sentenced Rong to six years and six months, Ho to five years and six months, and Wang to four years and six months, with the three also being fined NT$6 million (US$209,000), NT$5 million, and NT$4 million, respectively.