Crime China's IP Thievery: UMC pleads guilty for stealing $9 Billion worth of trade secrets from Micron

[senri]

I'm worried that I made this thread kind of inaccessible from the start as it is lol. And condensed matter physics (semiconductors) definitely isn't my fucking field of study; it's just the epitome of high-level technology, an invaluable US industry and primary driver of American innovation.

The metro-area I live probably doesn't hurt. Intel has a massive presence with three separate fabrication plants (plus an assembly site) and is the largest manufacturing employer in the state, and one of the five largest outright. ON Semiconductor and Microchip - both top 20 in the sector in global revenue - are headquartered here. I got a buddy from school who's a process technician at Microchip.

https://www.bizjournals.com/phoenix...sting-7-billion-in-chandler-facility.amp.html

Intel Corp. announced plans today to invest more than $7 billion to complete the most advanced semiconductor factory in the world in Chandler.

The completion of the high-volume factory, known as Fab 42, will take three to four years and create 3,000 high-tech, high-wage Intel jobs for process engineers, equipment technicians and facilities support engineers and technicians.

Fab 42 is expected to create more than 10,000 long-term jobs in Arizona combined with the indirect impact on businesses that will support the factory’s operations.

Gov. Doug Ducey said Intel's expansion is "huge news" for the state.

"With thousands of jobs and a $7 billion investment, Fab 42 will create a ripple effect throughout our economy," Ducey said in a statement. "This means jobs for Arizonans, and a historic investment in our state. Intel's commitment to Arizona speaks volumes about our workforce, advanced educational infrastructure, business environment and commitment to technology and innovation. This represents a core area of Arizona expertise, advanced engineering and manufacturing."

Very good use of the gif.

 

[NoDak]

the real travesty is corporate espionage?

Yes.

Sounds like what Steve Jobs called the beehive affect. He was very lucky to grow up where and when he did. It sounds like what is happening in Arizona now. When you have all these companies around a small area it creates a beehive affect. In the old days, picking up your family and moving to a place like AZ for a new job could be risky because it is the only game in town. WIthin a beehive like Silicon Valley. A software engineer for example can switch companies without even moving or having his kids change schools.

I mean Jobs grew up in a time when he could literally find Bill Hewlett's number in the local phone book and call him. And he did. There were opportunities all around there if you just tried. He called Hewlett at home and Hewlett actually answered. lol. Jobs asked if he had some spare parts he could have. Hewlett laughed and said sure, and also gave Jobs a job on the assembly line making those parts. That could not happen in the vast majority of the country.

The "Silicon Desert".

I think it's lame but it really has gone from being a lowly call center hub to a mini tech hotbed, for semiconductors in particular. Intel has invested over $20 billion into the area over the last two decades and has a larger presence here than anywhere else in the world while Arizona-based ON and Microchip have both grown into multi-billion dollar, publicly traded companies. The chairman of Microchip is a former Intel employee. NXP, Maxim Integrated, Marvell and Qorvo all have facilities here as well.

Arizona State has been named the most innovative university in the country the last four consecutive years by US News & World Report and is really starting to expand its research capabilities. I'm in molecular sciences but the biggest thing it has going for it is probably the Ira A. Fulton Schools of Engineering with over 20,000 students. Northrop Grumman is making Chandler the HQ of its launch vehicle division, Boeing has been here since the early 1980s and is the home of the AH-64 Apache, etc.

It's the deep talented labor pool, educational infrastructure and business environment but also quality of life, cost of living and supply of land. There's the IDEA project (Innovation, Discovery, Education and Arts) under construction now as well, a bio-tech campus of five buildings covering 18 acres of land and 1.2 million square feet. Shit is popping off and has created an awesome, vibrant environment. How the fuck can I go back home?!

Some of the evils perpetrated on the local community.

Intel And Boeing Prep Educators for New Crop of High Tech Courses

How Intel and Boeing Are Helping These Kids Learn STEM Skills

Intel, Arizona SciTech and Arizona Science Center Starting Program For K-12 Schools To Work Together In STEM

Boeing Grants Support Public School STEM Programs

Boeing Partners With Public Schools to Excite Students About Science and Technology

edit: word suggestion is wong.

 

[squeezewax]

I get sick of hearing about China doing this type of thing, what does the West do to punish them, nothing?

 

[NoDak]

From 2017 IP Commission Report:

 

[MicroBrew]

The Chinese are truly epic in I.P. thievery , industrial espionage and counterfeiting. They also seem to have no shame in blatantly copying the designs of others, be they Japanese, European or American.
They have vehicles that look not coincidentally similar to Mercedes, Japanese brands, British brands. You don't see these copy-cat vehicles here, but in developing countries you find them.

Chinese employees and manufacturers routinely rip-off well known power tool brands. There are plenty of no name Chinese branded powertool that look identical to tools made by Hitachi, Milwaukee, Makita and others. What I read is that sometimes when a Japanese or American or German tool brand sets up shop in China, some employees steal the I.P. and or leave the company to set up their own company or are approached by a Chinese manufacturer to help them make an overt carbon copy of the branded tool. I read on a construction forum that after Caterpillar set up shop in China, a Chinese manufacturer started churning out copies of Cat equipment.

What is amazing is that the US government has never taken a hard line against Chinese theft of US creativity. We are always being told that America is corporatist and big business runs the show yet the government didn't hold China accountable. If American foreign policy is all about resources and wealth, then why hasn't the US gov. done anything substantial against this thievery.

 

[NoDak]

Making semiconductors, by contrast, requires billions in up-front capital and can take a decade or more to see a return. In 2016, Intel Corp. alone spent $12.7 billion on R&D. Few if any Chinese companies have that capacity or the experience to make such an investment rationally. And central planners typically resist that kind of risky and far-sighted spending.

No joke.

Semiconductor fabrication plants require many expensive devices to function. Estimates put the cost of building a new fab over one billion U.S. dollars with values as high as $3-4 billion not being uncommon.

The central part of a fab is the clean room, an area where the environment is controlled to eliminate all dust, since even a single speck can ruin a microcircuit, which has features much smaller than dust. The clean room must also be damped against vibration and kept within narrow bands of temperature and humidity. Controlling temperature and humidity is critical for minimizing static electricity.

The clean room contains the steppers for photolithography, etching, doping and dicing machines. All these devices are extremely precise and thus extremely expensive. Prices for most common pieces of equipment for the processing of 300 mm wafers range from $700,000 to upwards of $4,000,000 each with a few pieces of equipment reaching as high as $130,000,000 each (e.g. steppers). A typical fab will have several hundred equipment items.

 

[NoDak]

Chinese Firm Fujian Jinhua Denies Stealing IP From Micron

SHANGHAI (Reuters) - Chinese chipmaker Fujian Jinhua Integrated Circuit Co Ltd said on Saturday it has not stolen any technology, after the U.S. Justice Department indicted the state-back firm for stealing trade secrets.

The U.S. Justice Department on Thursday indicted Fujian Jinhua, Taiwan’s United Microelectronics Corp and three individuals for conspiring to steal trade secrets from U.S. semiconductor company Micron Technology Inc relating to its research and development of memory storage devices.

Earlier in the week, U.S. President Donald Trump’s administration took action to cut Fujian Jinhua off from U.S. suppliers.

“Behaviour to steal another firm’s technology does not exist,” Fujian Jinhua said in a statement posted on its official website.

“Micron regards the development of Fujian Jinhua as a threat and adopts various means to hamper and destroy the development of Fujian Jinhua,” the statement said.

The company “always attaches great importance to the protection of intellectual property rights,” Fujian Jinhua added.

 

[NoDak]

Micron: The Chinese DRAM Threat Has Taken A Hit

Last week, the Trump administration's Commerce Department placed Fujian Jinhua "on a list of entities that cannot buy components, software, and technology goods from U.S. firms." Additionally, of its own accord (supposedly), United Microelectronics (UMC) halted R&D with Fujian Jinhua due to the move by the US Commerce Department. But, this was likely an olive branch offering as the US Justice Department three days later indicted UMC and Fujian along with three individuals for conspiring to steal trade secrets from Micron.

You can read the specifics of the Trump administration's moves yourself as I want to focus on what this means for the DRAM market as well as Micron.

The reason this knocks at the foundation of the Chinese DRAM pillar starts with sourcing manufacturing equipment. It has been speculated by sources Fujian Jinhua has already acquired manufacturing equipment with the purpose of producing DRAM. Even if this is 100% true, the problem with sourcing equipment at such an early stage is the ability to ramp to fruitful, meaningful output requires additional equipment.

Setting a fab up for 20,000 wafer starts per month (WSPM) requires less equipment than one trying to produce 100,000 WSPM. To get to high output levels - all difficulties in setup and equipment tuning aside - requires more manufacturing lines.

The ban placed by the Commerce Department now requires a license to export, re-export, and transfer software, components, and technology to these two companies. This license, however, "will be reviewed but with a presumption of denial," according to the Department.

But China can source equipment from companies outside the US, right? Possibly, but let's take a look at a list of the leading semiconductor equipment manufacturers in the world and the implications therein.

Three out of the top five are US-based companies - Applied Materials (AMAT), Lam Research (LRCX), and KLA-Tencor (KLAC). ASML is a provider out of the Netherlands while Tokyo Electron, as you can surmise, is a Japanese-based company. And, as you also might surmise, Japan doesn't have the greatest relationship with China. This leaves only one out of the top five semi-equipment companies in the world able to sell to China - if it has the bandwidth to do so.

To make matters worse, if Fujian were already working with and sourcing its production equipment lines from any of the other four, it would have to start adding new lines with no baseline for equipment tuning, and for that matter, the would-be already figured out process can't be duplicated easily. Not having identical lines make for a poor DRAM manufacturing environment, not to mention a tuning and maintenance nightmare.

So, not only being short on sources for equipment but also once a secondary source is acquired, the ramping process starts from a much more primitive level, rather than merely duplicating other lines and getting up to speed faster than the initial line.

Furthermore, the most important aspect of memory manufacturing is R&D and movement toward the next generations of DRAM. Memory manufacturing is not about the current generation. The big three suppliers, Micron, Samsung (OTC:SSNLF), and SK Hynix (OTC:HXSCF), are working three generations ahead today along with any new memory types they might have.

For China, just getting on the DRAM train now means it will fall further behind if it's not also doing this. This becomes an issue as it can't access US technology and components to further R&D. Additionally, it can't purchase equipment to add to established lines for the required additional steps of newer generations or make up for lost wafer starts from node transitions.

The second issue for Fujian is its ties with other companies are being weakened. Taiwan-based United Microelectronics appears to have created a knock-on effect. UMC wasn't obligated to halt R&D activities with Fujian under any of the edicts sent down last week, but if the Taiwan company wants to work its way to the Trump administration's good side, it will want to sever ties with others related to the indictment.

 

[Fox by the Sea]

pay 9 billion to obtain 90 billion worth of profits and further a geopolitical agenda

sounds like a pretty good deal to me.

 

[xcvbn]

Why people still do business with the Chinese is not understandable to me.
They have no ethics.

Wage slavery

 

[NoDak]

Wage slavery

It's really more for market access at this point and there are some sectors Beijing will only let foreign firms operate through joint ventures in which Chinese partners have the majority stake. China's wages have gone up by 155% in the last decade and are now on par with those of several Eastern European countries.

It isn't going to be advantageous to keep manufacturing in China for much longer either, the unparalleled brilliance of American innovation is going to win again. Micron was also doing business with a firm in Taiwan, not the PRC. They conspired to turn its IP over to the Mainland shithouse.

 

[jrams]

The Chinese are truly epic in I.P. thievery , industrial espionage and counterfeiting. They also seem to have no shame in blatantly copying the designs of others, be they Japanese, European or American.

It's common practice there. The company I work for is one of the first SaaS companies in the space and some of our customers paid for a couple onsite trainings over in mainland China as well as Taiwan. We couldn't get people to sign up for the product before getting there because, as our main liaison told us, "they can't find a pirated copy of your software so they don't know where to start." Even after the training, some of the people who attended asked us where they could get a free copy of it.

 

[Arkain2K]

 

[Seano]

I think the US should make up some super inflated number based on evidence we have of Chinese cyber crimes and tell China that we've subtracted it from our debt.

 

[NoDak]

 

[Arkain2K]

UMC to Pay U.S. Justice Department $60 Million for Infringing Micron's IP​

United Microelectronics Corp. has announced that it has reached a deal to settle a legal case filed against it by the U.S. Department of Justice two years ago. UMC will pay millions of dollars for providing a DRAM process technology to Fujian Jinhua Integrated Circuit Company (aka Fujian or JHICC) after illegally obtaining crucial IP from Micron Technology (via TSE MOPS / TrendForce).

Under the terms of the settlement between UMC and the U.S. Justice Department, the contract maker of semiconductors will pay approximately $60 million for dismissing the lawsuit. The resolution — which is still to be approved by the court — solves a major problem for UMC which could have destroyed it. This does not mean that everything is all over for UMC as there is still an ongoing lawsuit filed against the company and its partner JHICC by Micron in the U.S. District Court for the Northern District of California.

In a bid to support 'Made in China 2025' program, local authorities in Fujian, China, established JHICC, a local maker of DRAM, in early 2016. The new company had to hire engineers and develop a fabrication process to make competitive memory, but while there are a lot of semiconductor engineers in China, development of a manufacturing technology takes a long time. To that end, JHICC inked a deal with UMC to design a DRAM production process in May 2016, months before it started to construct its $5.65-billion 300-mm fab in July 2016.

UMC is known primarily for its logic fabrication processes. Micron claims that instead of designing a DRAM technology, it poached engineers from Micron’s subsidiaries in Taiwan and requested them to obtain specifications and various peculiarities of Micron's manufacturing processes. The U.S. authorities say that under the terms of the deal between JHICC and UMC, JHICC would provide $300 million for procuring necessary equipment for DRAM development and would pay $400 million to UMC based on the progress of DRAM development.

Eventually, Micron sued both JHICC and UMC for patent infringement, the U.S. Department of Commerce banned JHICC from selling its products in the USA and added it to the Entity List (which means it cannot get U.S.-made equipment, parts, materials, technologies etc), whereas the U.S. Department of Justice filed an indictment against JHICC, UMC, and several engineers charging them with a conspiracy to commit economic espionage and steal IP from Micron.


Micron’s complaint seeks damages, restitution, disgorgement of profits, injunctive relief, and other applicable relief. Since JHICC is not a big DRAM maker and not a significant rival to Micron, even if found guilty by the court, its payments to the U.S. company will not be too high for a government-backed company. But if the court has sided with the U.S. DoJ's allegations and found JHICC and UMC guilty of things like corporate espionage and IP theft, each company would have faced forfeiture and a maximum fine of more than $20 billion. Such sums would have inevitably destroyed both JHICC and UMC.

By settling with the U.S. DoJ, UMC naturally avoided a massive fine. It will still have to settle with Micron. What remains to be seen is how much it will have to pay to the U.S. DoJ and Micron in total and whether after these payments it will still benefit from its contract with JHICC that provided it with $300 million-worth of equipment and $400 million for the process technology. It will also be interesting to see what is going to happen to JHICC.

The statement by UMC reads as follows:



"As previously disclosed, United Microelectronics Corp. has been responding to charges brought by the U.S. Department of Justice based on, among other things, an allegation of conspiracy to engage in theft of trade secrets of Micron Technology by the Company, Fujian Jinhua Integrated Circuit Co., and certain individuals.

The Company has been negotiating and discussing potential resolution of these charges with DOJ, and the Company anticipates reaching a resolution with DOJ in the foreseeable future. It is anticipated that a court hearing will occur in the near future to address the anticipated resolution of these charges.

In connection with this anticipated hearing, UMC and DOJ have each submitted a sentencing memorandum to the court regarding the terms of the proposed resolution, which would include a proposed plea to a lesser charge and a proposed $60 million fine.

As such, the Company can now reasonably estimate a probable loss and has recorded an aggregate accrual of $60 million with respect to these matters. As the discussions are continuing and any final resolution will require court approval, there can be no assurance that the Company's efforts to reach a final resolution will be successful, including as to the amount of a fine, or the timing and terms of such a resolution."

https://www.tomshardware.com/amp/news/umc-micron-ip

 

[Low Test With da Best]

My department uses drones for some things (searches, major traffic collisions or crime scenes, etc) and just figured out that all video taken by the drone cameras ends up being sent to China by the company that retains it.

Why's that?

 

[JonnyTsunami91]

WW III already started and people don't know what side they're on

 

[Neph]

"China — like any advanced nation — must decide whether it wants to be a trusted partner on the world stage, or whether it wants to be known around the world as a dishonest regime running a corrupt economy founded on fraud, theft and strong-arm tactics," Attorney General Jeff Sessions said at a news conference.

Everyne knows the decision they've made

 

[JonnyTsunami91]

Everyne knows the decision they've made

It's bad

https://www.reuters.com/article/us-...y-on-u-s-payroll-agency-sources-idUSKBN2A22K8

The country wants to hear about Derek Chauvin, TranSports, Meghan Markle and whatver the next Social Media Challenge is. China is most likely going to declare war under Biden.