The ailing Chinese chipmaker, Fujian Jinhua, is looking to an unexpected quarter for rescue — Micron, the US semiconductor company whose trade secrets it is accused of pilfering.
The state-owned company, one of the national champions at the heart of China’s efforts to develop a domestic semiconductor industry, was stopped from starting production late last year when the US government indicted it for allegedly stealing Micron’s intellectual property and barred it from buying vital tools and materials from US suppliers.
Now Jinhua is seeking a deal with a foreign semiconductor company willing to provide technology and expertise in running a chip fabrication plant, or “fab”, in exchange for use of the site, according to people familiar with the matter.
The move puts a spotlight on one of the key cases at the centre of US allegations that China is stealing technology just as the trade war between the two countries is escalating again.
In their previous round of negotiations, American and Chinese officials had been seeking to resolve the case as part of a draft trade deal. But after US president Donald Trump said this week the next wave of tariffs on Chinese goods would be imposed on Friday and China threatened retaliation, industry insiders believe that is becoming more unlikely.
An executive at a foreign supplier that worked with Jinhua until last year said the company had put itself up for sale and was eyeing Micron as a potential buyer. Two people at foreign chipmakers said they had been approached with an informal proposal for a deal.
“The Fujian provincial government is open to various options. It could be a joint venture or just a licensing deal,” said a person close to Fujian Electronics and Information (Group) Co, one of the firm’s two shareholders, which is controlled by the provincial authorities.
“It should be a pretty attractive proposition for Micron because they gain access to a brand-new fab without having to invest billions. It should be attractive for a lot of foreign semiconductor manufacturers for that matter,” he said.
Micron declined to comment. But one person familiar with its thinking rejected the idea that the company was planning any kind of partnership with or investment in Jinhua.
People close to Jinhua, as well as industry insiders familiar with the US-China trade and technology war, said the company’s fate was in the US government’s hands.
Jinhua is pushing the Trump administration to remove it from a list of companies that are banned from buying US goods.
People close to the Chinese company said they believed the ban was imposed for commercial reasons because it posed a threat to its US rival Micron, rather than over national security concerns.
The company has drawn up plans under which it promises to limit its capabilities in certain regions, such as Europe, so as not to pose as much of a competitive threat to Micron.
It has submitted those plans to the US commerce department in the hope that the Trump administration will be persuaded to take a softer line.
The US justice department alleges Jinhua conspired to obtain Micron technology through UMC, a Taiwanese contract chipmaker that is also a defendant in the criminal case.
Micron alleges that former employees of a company it had acquired left to join UMC, from where they handed technology belonging to the US chipmaker to Jinhua. UMC and Jinhua have denied the allegation.