U.S. Government Indicts Chinese DRAM Maker JHICC on Industrial Espionage; Bans Exports To Firm
The U.S. Department of Commerce [DoC] this week banned U.S. exports to a China-based maker of DRAM. The DoC believes that Fujian Jinhua Integrated Circuit Company (also known as Fujian or JHICC) not only uses technologies obtained from Micron, but also threatens the latter's long-term economic viability and therefore could also be involved in activities that are contrary to the U.S. national security interests.
In the meantime, the U.S. Department of Justice [DoJ] has also filed an indictment against JHICC, United Microelectronics Corp. (UMC), and several individuals accusing them of corporate espionage and stealing IP from Micron. Between the two, the U.S. authorities essentially sided with claims that Chinese makers of memory have illegally obtained IP and technologies from DRAM makers from the U.S. and potentially other countries.
As a result of DoC actions against JHICC, all U.S.-based (and, actually, non-U.S.-based too) companies will require a special license for all exports, re-exports, and transfers of commodities, software and technology subject to the Export Administration Regulations (EAR). DoC makes no secret that such license applications will be "reviewed with a presumption of denial", so it will be tremendously hard for JHICC to obtain practically everything, including Windows 7 licenses for manufacturing equipment and production tools themselves (ASML has a strong presence in the U.S., whereas Nikon Precision is based in California). Meanwhile, the whole situation is somewhat more complex.
Related: Tsinghua to Build $30 Billion DRAM/NAND Fabrication Plant in Nanjing, China
Related Stories
A new semiconductor fabrication plant in China could upend the DRAM and NAND industries:
Tsinghua Unigroup, one of the many tentacles of the Chinese state-controlled Tsinghua University, announced that it is investing $30 billion to build a new DRAM and NAND fab in Nanjing, China. The development comes as the company seeks to rapidly expand after its 51% buy-in of Yangtze River Storage Technology, which recently announced a separate $24 billion DRAM and NAND fab in Wuhan, China.
The NAND industry is falling deeper into the largest shortage in its history, and many industry analysts predict that we will experience yet another DRAM shortage in the coming months. Both the NAND and DRAM industries have consolidated down to a few key players, and predictable production output has kept supply and demand dynamics largely balanced for several years. However, a rash of 3D NAND developmental delays have delayed major players, such as SanDisk, Toshiba, SK hynix, and to a lesser extent Intel and Micron, from reaching production projections. These delays are the catalyst for the current shortage, but the entrance of the potentially unpredictable Tsinghua could upset the delicate supply balance, thus causing an eventual glut. The staid semiconductor industry would rather weather shortages than the margin-killing gluts, so the Tsinghua developments are concerning for the established players.
Additional coverage at:
http://www.reuters.com/article/us-tsinghua-plant-idUSKBN1532ED
Screeech... DRAM! Weak demand hits memory-makers as they slam on CAPEX brakes – analyst
The three DRAM suppliers are scaling back production growth as memory demand falters with no sign of recovery. The DRAMeXchange research outfit has said annual DRAM capital expenditure (CAPEX) growth has gone negative for 2019 as Samsung, SK Hynix and Micron respond to weak seasonal demand in the first quarter and beyond. DRAM prices had risen for nine consecutive quarters until the last 2018 quarter, when they fell 10 per cent compared to the third quarter.
The demand outlook for PCs, servers, smartphones, and other end-consumer products is weak and the threat of a China-US trade war is not helping things. DRAMeXchange expects first quarter DRAM prices to show a 15 per cent fall, and see 10 per cent in the next, and then 5 per cent in both the third and fourth quarters, unless something positive happens, like China and the USA becoming best buddies.
The three DRAM suppliers are locked into some production output growth this year but have scaled back their CAPEX plans and reduced growth expectations as a result of the price falls.
Related: Tsinghua to Build $30 Billion DRAM/NAND Fabrication Plant in Nanjing, China
IC Insights Predicts Additional 40% Increase in DRAM Prices
Samsung Preparing to Build Another Memory Fab Near Pyeongtaek for $27.8 Billion
U.S. Indicts Chinese DRAM Maker JHICC for Alleged Industrial Espionage
(Score: 0) by Anonymous Coward on Friday November 02 2018, @07:40PM (7 children)
I fully support Trump administration on making the Chinese pay for their unfair and illegal trade practice, about the only Trump policy I can endorse.
(Score: 4, Interesting) by qzm on Friday November 02 2018, @08:20PM (6 children)
Great. So does that mean the US will also punish their own companies who profit by having their goods made in sweat ships that would be illegal under US law?
Not to mention the complete lack of any due process here. One side has accused the other of such things, not proven anything..
All sounds very world police/kangaroo court at this stage.
I'm not saying it is not true, however 'siding with' doesn't sound very convincing I am afraid.
As to thinking non-us companies have to follow the rules.. because they have a us presence.. hmmm.
I wonder how the us will feel of that gets a bit of turn around on them.. not so good I expect.
Google has a presence is most countries.. should everyone start enforcing laws on what they can do in the us?
(Score: 2) by MostCynical on Friday November 02 2018, @08:26PM (2 children)
But the US only stole* from the nazis.
*Relocated scientists in war time
"I guess once you start doubting, there's no end to it." -Batou, Ghost in the Shell: Stand Alone Complex
(Score: 2) by legont on Saturday November 03 2018, @12:31AM
The US stole mostly from British.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 0) by Anonymous Coward on Saturday November 03 2018, @01:21AM
The US stole parts of their space program from the Soviet Union:
https://www.popsci.com/cias-bold-kidnapping-soviet-spacecraft [popsci.com]
(Score: 2) by requerdanos on Friday November 02 2018, @08:41PM
International law, as well as U.S. law as it applies to business done in other countries, is complex, but in general, the answer is a qualified "yes".
For example, one penalty is that it will now be more difficult for these shady operations to sell any of their products to Fujian Jinhua Integrated Circuit Company.
(Score: 0) by Anonymous Coward on Friday November 02 2018, @08:48PM (1 child)
In China, it's the Chinese laws, as in American, it's American laws. The problem is the trading treaty between the two.
Back in the days, Chinese needed help, so we gave them some. It ain't like that no more, with them being the second biggest economy in the world.
No more IP theft, no more illegal contamination, no more illegal fishing fleets, no more of them chicom nonsenese. If they don't respect the international norms of trade, I don't see why we should when dealing with the Chinese.
Lastly, if you love China so much, go back to China then.
(Score: 3, Interesting) by Sulla on Friday November 02 2018, @09:20PM
I'd like to go back to China, but the standard of living is too low! We need to hurry up the transfer of research, development, and manufacturing to China so that we can build it up and I can move back once the US is wrung dry
Ceterum censeo Sinae esse delendam
(Score: 1, Insightful) by Anonymous Coward on Friday November 02 2018, @08:27PM (1 child)
Where does the corporation end and the government begin? Very hard to tell!
(Score: 2) by MostCynical on Friday November 02 2018, @08:37PM
There is no line of separation.
"I guess once you start doubting, there's no end to it." -Batou, Ghost in the Shell: Stand Alone Complex
(Score: 2) by MichaelDavidCrawford on Friday November 02 2018, @08:39PM (3 children)
Roffle Copters
Yes I Have No Bananas. [gofundme.com]
(Score: 2) by richtopia on Saturday November 03 2018, @12:06AM (2 children)
Windows 7 may be a commodity/easily pirated, but the tooling also mentioned typically has one or two vendors world wide. Without being able to purchase new scanners, this fab will be relegated to obscurity as they struggle to buy obsolete used equipment.
(Score: 2) by EETech1 on Saturday November 03 2018, @07:13AM (1 child)
OTOH they are really good at copying.
They have a lot of people studying abroad.
They are not stupid.
Hopefully they aren't planning on making the next generation of Fab equipment themselves with the hope of putting the existing players out of business in that market too!
Don't sell us chips... We then make our own...
Don't sell us the tools to make better chips...
We will make that too!
Don't think we intimidate them.
Do you really think they will say "sorry 2025, if it weren't for the US government, we could have reached our goal of not having to rely on the rest of the world"
(Score: 2) by MichaelDavidCrawford on Saturday November 03 2018, @06:16PM
In the Summer of 1981 someone told me that US chips had gotten too small for the Soviets to reverse engineer, which had actually benefited the Soviets as having to design their own chips promoted their own chip design industry.
Back in I think it was the fifties, there was a rubber embargo against china. Now they have their own rubber tree forests.
Yes I Have No Bananas. [gofundme.com]
(Score: 2) by Runaway1956 on Friday November 02 2018, @09:06PM
The US, it's politicians, and it's corporations have been whoring themselves to China for so long, it's difficult to work up any indignation that a Chinese company might be using US technology. If some chick has made it her goal to be fucked by every male in the county, how can anyone be surprised that she gets pregnant, and infected with half a dozen sexually transmitted diseases?
(Score: 5, Insightful) by RamiK on Friday November 02 2018, @09:38PM (4 children)
That is, the US intervened with a legit, TRIPS protected, technology transfer deal under false "national security" claims to keep China at a technological disadvantage in a free market product: RAM. This is precisely what TRIPS was meant to prevent. So now, China retaliated by similarly violating TRIPS and attempted IP piracy and trade secrets theft... Color me shocked.
Seriously, there must have been dozens of justifiably reprimandable trade secret thefts led by Chinese nationals against US corporations over the years. Use those to make your arguments. This one... This one isn't it.
compiling...
(Score: 2) by legont on Saturday November 03 2018, @12:45AM (1 child)
The sad truth is that in truly free trade and protected rights world the US will be a looser. We have laws/agreements designed to our advantage and we violate more.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 2) by RamiK on Saturday November 03 2018, @09:50AM
But that's playing a rigged game that rewards nothing to the winner. Why should the US ruin its populous' quality of life by economically warring against everyone else on the globe for the distinction of being the wealthiest? Once you're a developed nation, that money can't buy you anything worth while you don't already have except the silliest of luxuries. Even the best weapons don't mean squat when the threat of nuclear warfare keeps all those fancy high-tech planes and ships in storage. We understand this when we look at military expenditure since we understand pouring money into nothing of value doesn't make any sense. But that's exactly what the US is doing when its trying to be the best economically.
compiling...
(Score: 2) by HiThere on Saturday November 03 2018, @04:37PM (1 child)
It's not clear that there were "false 'national security' claims". Keeping at least one local RAM maker seems a legitimate national security goal. Since it's politically impossible to subsidize it enough to keep it viable, then the claim seems valid. That said, the Chinese have exactly the same requirement, so since they were prevented from buying the technology, it's not surprising they went to other methods. Other countries, including the US, have done the same.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 2) by RamiK on Saturday November 03 2018, @08:31PM
Foreign trade isn't national security. Unless you need RAM to feed the people, fuel the tanks/planes or arm the troops, there are no national security issues. If you start expanding the definition of national security to non-critical industries, you end up with a police state working under a Juche ideology. And if you think its fine so long as they are profitable, I'll remind you of the F35...
If you're really going there then keep a small fab like IBM's SUNY Poly NanoFab for research and emergencies. There's plenty of aviation and automotive parts outsources to China that are similarly critical to "national security". What's the big difference?
compiling...
(Score: 0) by Anonymous Coward on Saturday November 03 2018, @01:26AM
I woulda though the obvious department for this story is the "ham-sammich [athensnews.com]" department.