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U.S. President Donald Trump's administration took action on
Monday to cut off Fujian Jinhua from U.S. suppliers amid
allegations the firm stole intellectual property from U.S.
semiconductor company Micron Technology Inc <MU.O>.
The action against Fujian Jinhua could ignite new tensions
between Beijing and Washington since the company is part of the
"Made in China 2025" program to develop new high-technology
industries.
The U.S. Commerce Department said it had put Fujian Jinhua
Integrated Circuit Co Ltd on a list of entities that cannot buy
components, software and technology goods from U.S. firms.
"UMC will follow all government regulations and temporarily hold
the R&D activities we are performing for Fujian Jinhua until we
are cleared to resume by the appropriate authorities," the
Taiwanese company said in a statement late on Wednesday.
"The U.S. ordered sanctions, (so) we will follow U.S. government
regulations as well," Richard Yu, head of UMC's corporate
communications, told Reuters.
He said UMC was not considered a "supplier" as the Taiwan
company does not export any products to Fujian Jinhua.
Attracting semiconductor expertise and talent from Taiwan has
become a key part of an effort by China to put the chip industry
into overdrive and reduce Beijing's dependence on overseas firms
for the prized chips that power everything from smartphones to
military satellites.
UMC and Fujian Jinhua signed a technology cooperation agreement
in 2016 for UMC to develop memory-related technologies for the
Chinese firm, stock exchange filings show.
"Jinhua will provide UMC with DRAM related equipment, as well as
service fees to cover R&D expenses according to the progress of
the technology development. The developed technologies will be
jointly owned by both parties," a statement said.
The world's top two economies are already waging a tariff war
over their trade disputes, with U.S. duties in place on $250
billion worth of Chinese goods and Chinese duties on $110
billion of U.S. goods.
The U.S. action is similar to a Commerce Department move that
nearly put Chinese telecommunications equipment company ZTE Corp
<000063.SZ> out of business earlier this year by cutting it off
from U.S. suppliers.
(Reporting By Jess Macy Yu and Yimou Lee; Editing by Emelia
Sithole-Matarise)
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