Experts hail lawsuit settlement between chipmakers

United States-based chip producer Micron Technology has settled an intellectual property lawsuit with Chinese memory chip maker Fujian Jinhua Integrated Circuit Co, a move that experts said can pave the way for the positive development of both companies in the future.

The comments came after a Micron spokeswoman said in a statement that "the two companies will each globally dismiss their complaints against the other party and end all lawsuits between them".

Roger Sheng, vice-president of research at US market research company Gartner Inc, said that a global settlement agreement between Micron and Fujian Jinhua can create a better development environment for both companies in the future.

The move also shows that Micron is committed to the Chinese market and is making efforts to revive its business in the country, Sheng said.

After South Korean chip companies Samsung and SK Hynix, Micron is the world's third-largest maker of dynamic random access memory chips, which are flash memory semiconductors widely used in smartphones, personal computers and servers.

The Chinese mainland is a big market for Micron, accounting for around 11 percent of the company's $30.8 billion global sales in 2022, according to its financial report.

The dispute between Micron and Fujian Jinhua had been going on for years. In 2017, Micron sued Fu-jian Jinhua and the latter's partner United Microelectronics Corp. Fu-jian Jinhua did not respond to requests for comments on the settlement.

In November, Sanjay Mehrotra, president and CEO of Micron, visited Beijing and met China's Minister of Commerce Wang Wentao. Wang said during the meeting that China welcomes Micron to continue to take root in and deeply cultivate the Chinese market, and achieve better development while complying with Chinese laws and regulations.

Mehrotra expressed a willingness at the meeting to continue expanding investments in China.

The meeting came after Micron said in June that it would invest about 4.3 billion yuan ($600 million) in its chip packaging plant in Xi'an, Shaanxi province, as part of its long-term commitment to the Chinese market.

Micron said part of the planned investment will go toward the purchase of packaging equipment from a Xi'an-based subsidiary of Powertech Technology, which Micron has been using in the factory since 2016.

Micron said it would offer job contracts to 1,200 employees of Powertech's Xi'an subsidiary and that the investment would create an additional 500 jobs. This would bring Micron's workforce on the Chinese mainland to more than 4,500.

Before the announcement of the investment plan, the Cyberspace Administration of China had said in May that products of Micron sold in China had not passed a recent cybersecurity review, and operators of the country's key information infrastructure should stop purchasing its products.

Xiang Ligang, director-general of the Information Consumption Alliance, a telecom industry association in Beijing, said this is also good news for the development of China's memory chip industry, as Fujian Jinhua can be an important player in producing memory chips.

The World Semiconductor Trade Statistics has forecast the size of China's memory chip market to hit 650 billion yuan ($91 billion) in 2023. In comparison, the global size of the memory chip market is expected to stand at $165.8 billion.