Taiwanese Company Admits Stealing US Trade Secrets

A company in Taiwan has been fined $60m after pleading guilty to stealing trade secrets from an American semiconductor company.

United Microelectronics Corporation (UMC), a semiconductor foundry based in Hsinchu that turned 40 this year, admitted to swiping secrets from Micron Technology, a leading producer of computer memory and computer data storage that is headquartered in Boise, Idaho.

UMC was indicted by a United States federal grand jury in September 2018 for conspiracy to steal, convey, and possess trade secrets stolen from Micron for the benefit of the Fujian Jinhua Integrated Circuit Company. 

Fujian, a state-owned enterprise of the People's Republic of China, was also indicted on the same charges, along with three individuals UMC says it hired from Micron's Taiwan subsidiary. The company denies any wrongdoing.

Yesterday the United States Justice Department announced that UMC had admitted stealing the secrets and had agreed to cooperate with the US government in the investigation and prosecution of its Chinese co-defendant.

In a statement released on October 28, the Department of Justice said: "As a result of today’s guilty plea, and in accordance with an accompanying plea agreement, UMC, whose American Depository Receipts are publicly traded on the New York Stock Exchange, will pay the fine—the second largest ever in a criminal trade secret prosecution, be subject to a three-year term of probation, and cooperate with the United States."

Under the plea agreement, UMC pleaded guilty to one count of criminal trade secret theft. Other criminal charges and a parallel civil suit by the United States against the Taiwanese company will be dismissed. 

The criminal prosecution of Fujian and the three individual defendants will continue, with a trial US Attorney David Anderson deemed likely to occur next year.

Continuing also is a civil action that seeks to prohibit Fujian from the further transfer of stolen trade secrets and from the export to the United States of products manufactured by the PRC-owned company using trade secrets stolen from Micron.

“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,” said Deputy Attorney General Jeffrey Rosen.

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