United Microelectronics Corp (UMC, 聯電) pledged “substantial assistance” to the US in a high-profile trade-secrets prosecution of Chinese chipmaker Fujian Jinhua Integrated Circuit Co (福建晉華).
UMC on Wednesday pleaded guilty in a San Francisco federal court in a deal with US prosecutors, who agreed to drop charges of economic espionage and conspiracy for the alleged theft of proprietary information from Idaho-based Micron Technology Inc.
UMC instead admitted to trade-secret theft and agreed to pay a US$60 million fine, the second-largest ever in a criminal trade secrets prosecution in the US.
The case was the first filed under the “China Initiative” of US President Donald Trump’s administration, a US Department of Justice program aimed at prioritizing trade-theft cases and litigating them as quickly as possible.
With UMC removed as a defendant, China becomes the target as tension with the West is aggravated by issues that include Beijing’s hacking and control of key technologies, its handling of the COVID-19 outbreak, tightening grip over Hong Kong and treatment of Muslim Uighurs.
“UMC’s guilty plea points this case toward trial against Fujian Jinhua in 2021,” US Attorney David Anderson said. “Criminal trade secrets cases protect freedom and innovation. These cases have global significance when a foreign defendant is charged with stealing intellectual property protected by US law.”
Prosecutors have not publicly detailed the cooperation that they are seeking from UMC against Fujian Jinhua. UMC declined to answer questions.
Investigations into three UMC employees who are allegedly involved in the case would continue, the justice department said.
According to the evidence admitted in connection with the guilty plea, the three employees — Steven Chen (陳正坤), Ho Chien-ting (何建廷) and Wang Yung-ming (王永銘) — all worked at Micron Taiwan before joining UMC.
Chen, who had been president at Micron Taiwan and was made senior vice president at UMC, brokered a deal with Fujian Jinhua to develop DRAM technology for the Chinese firm.
He then recruited Ho and Wang, who were still working at Micron as engineers, to join UMC.
Prior to leaving their jobs, Ho and Wang stole trade secrets from Micron and took them to UMC.
Wang, in particular, made adjustments to the DRAM technology they were developing at UMC based on the confidential information from Micron, the justice department said.
After UMC’s IT department found the stolen property on Ho’s computer, Chen approved the issuance of two “off network” laptops that allowed UMC employees to access confidential Micron information without being detected by UMC’s IT department.
When Taiwanese authorities began investigating the case, Ho and Wang asked another UMC employee to hide “papers, notes, USB drives, a personal phone and a laptop computer while the local authorities executed their search warrants,” the justice department said.
The justice department in 2018 formally charged UMC and Fujian Jinhua, as well as Chen, Ho and Wang, with crimes related to conspiracy to steal, convey and possess stolen trade secrets from a US firm.
UMC yesterday said that the company was glad to have reached an agreement with the US government.
“UMC takes full responsibility for the actions of its employees and we are pleased to have reached an appropriate resolution regarding this matter,” it said in a statement.
Micron said in a statement that it would continue to seek “full restitution” from UMC in a separate, ongoing civil lawsuit.
Neal Stephens, a lawyer for Micron, told US District Judge Maxine Chesney that with the resolution of the criminal case against UMC, Micron would push forward with its civil trade-secrets case against the company, which had been put on hold.
UMC has opposed reopening the case, Stephens said.
Still unknown is how much more money UMC might ultimately pay. In addition to the US fine, Micron would seek to make UMC pay restitution for the loss and damages caused by the theft.
The firms agreed that the sum would be argued in the civil suit, because there is a “great gulf and disparity” between what the two sides believe the value to be, said Leslie Caldwell, a lawyer for UMC.
A lawsuit against UMC in Taiwan about the same matter is still ongoing.
Additional reporting by CNA
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
THUGGISH BEHAVIOR: Encouraging people to report independence supporters is another intimidation tactic that threatens cross-strait peace, the state department said China setting up an online system for reporting “Taiwanese independence” advocates is an “irresponsible and reprehensible” act, a US government spokesperson said on Friday. “China’s call for private individuals to report on alleged ‘persecution or suppression’ by supposed ‘Taiwan independence henchmen and accomplices’ is irresponsible and reprehensible,” an unnamed US Department of State spokesperson told the Central News Agency in an e-mail. The move is part of Beijing’s “intimidation campaign” against Taiwan and its supporters, and is “threatening free speech around the world, destabilizing the Indo-Pacific region, and deliberately eroding the cross-strait status quo,” the spokesperson said. The Chinese Communist Party’s “threats