The charges against Taiwan-based United Microelectronics Corp 2303.TW , China state-owned Fujian Jinhua Integrated Circuit Co Ltd and three individuals who once worked for a unit of Micron mark the fourth case brought by the Justice Department since September as part of a broader crackdown against alleged Chinese espionage on USA companies.
The indictment released in the USA district court in San Jose, California alleges that Chinese state-owned Fujian Jinhua Integrated Circuit Co. and privately owned United Microelectronics Corporation of Taiwan, along with three UMC executives, conspired to steal Micron trade secrets to help UMC and Fujian Jinhua develop DRAM chips used in many computer processors.
On Thursday, Attorney General Jeff Sessions criticised China for violating an accord reached with the Obama administration, under which both governments agreed not to support cyberattacks to steal corporate secrets.
Three individuals were also charged, including a former General Manager and Chairman of Micron's Taiwanese branch, who later served as an exec at both UMC and Fujian Jinhua.
Court documents say Chen left Micron's Taiwan branch to join UMC in 2015, where, the DOJ says, he arranged a cooperation agreement between UMC and Fujian Jinhua, where UMC would provide DRAM technology that Fujian Jinhua would mass-produce in a new mega-factory the Chinese company would build.
Every individual will face a US$5 million fine and up to 15 years in jail if convicted for economic espionage charges, and 10 years imprisonment for theft of trade secrets charges, according to the indictment.
Tensions over trade in particular have exacerbated relations between the two world powers. According to the indictment, Micron maintains a significant competitive advantage in this field due in large part from its IP including its trade secrets that include detailed and confidential information pertaining to the design, development and manufacturing of advanced DRAM products.
The latest confrontation from the Trump administration is another allegation of economic espionage, this time directed at a Chinese state-owned enterprise and a Taiwanese firm, both of which the USA says stole secrets from chipmaker Micron.
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The accused individuals are Stephen Chen, JT Ho and Kenny Wang.
The administration has imposed $200 billion in tariffs on Chinese products and is holding out an additional $250 billion in tariffs.
DRAM is something that the Chinese government had identified as an important priority because its own companies could not develop such advanced capabilities and had to rely on companies outside of China, the Justice Department said.
John Demers, the head of the Justice Department's National Security Division, said Thursday that the multi-prong approach by the government has "stopped the harm" before it could manifest itself in a competing product. He said the government is launching a new initiative to crack down on Chinese espionage trade cases.
"This is a brazen scheme", Sessions said.
"We are committed to continuing to work closely with our federal, state, local, and private sector partners to counter this threat from China".
The indictment was filed on September 27, and unsealed on Thursday.
The Justice Department also filed a civil lawsuit that seeks to enjoin the transfer of stolen trade secrets in the case and to prevent the defendants from transferring information stolen in the case.