The ruling by the Fuzhou Court comes amid trade tensions between Washington and China over wide ranging issues including intellectual property.
Shares of Micron Technology are rallying Thursday, up 1.32%, after the company said the impact from a sales ban in China won't have be a huge negative on its business. When violations occur, UMC stands ready pursue patent infringement litigation in order to obtain judgment and remedies to protect the intellectual property rights of the company.
Among the remedies it sought was to stop Micron from making, importing or selling the allegedly infringing products and also destroy all inventory and pay compensation. UMC has declined to comment on the allegations.
Micron said it will comply with the ruling, while requesting the Fuzhou Court to reconsider or stay its decision. Further information regarding these and other risks is included in UMC's filings with the U.S. Securities and Exchange Commission, including its registration statements and reports on Forms F-1, F-3, F-6 and 20-F and 6-K, in each case as amended.
Analysts said the ruling would bolster Micron's well-established rivals.
Authorities within the Xi Jinping regime have repeatedly raised concerns over the increasing prices of memory chips in the country.
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Last year Micron sued UMC and its partner, Fujian Jinhua Integrated Circuit Co, claiming they stole memory chip trade secrets.
China is the largest market for semiconductors, yet isn't home to even one of the top 10 producers of the crucial electronic components.
The ban, along with a separate antitrust probe by China in early June against Micron and two South Korean chipmakers, SK Hynix and Samsung Electronics, are all "politically connected and intertwined", said Arisa Liu, an analyst with Taiwan Institute of Economic Research, a leading nonprofit think tank in Taiwan, in an interview with Japanese magazine Nikkei Asian Review.
After a day or two with few new trade-related developments, China's announcement that United States chipmaker Micron can no longer sell goods in the country has shaken investors. "The US is where the Action is!", Trump tweeted. United States markets were closed Wednesday in observance of Independence Day.
Meanwhile, Qualcomm is still waiting for permission from Chinese regulators to complete its acquisition of NXP Semiconductors. The company - which only two years ago was losing money, eliminating jobs and weighing an acquisition offer from China's Tsinghua Unigroup - almost doubled its year-over-year profit last quarter, to $3.82 billion.
The semiconductors then become the most important electronic parts in phones that are mostly made in China and then sold worldwide.