Taiwan's UMC pleads guilty in trade secret theft case

(Reuters) — Taiwan's UMC has pleaded guilty to trade secret theft in the United States and will pay a $60 million fine in a case where it was accused of helping a Chinese state-owned chipmaker steal secrets from Micron Technology Inc.

The fine is the second-largest ever in a criminal trade secret prosecution, the U.S. Department of Justice said.

UMC, formally known as United Microelectronics Corp.; China's Fujian Jinhua; and three individuals were indicted in 2018 for conspiracy to steal trade secrets from Micron.

As part of the agreement, the DOJ will dismiss allegations against UMC including conspiracy to commit economic espionage, as well as a related civil case. UMC will also be subject to a three-year term of non-supervised probation.

“UMC stole the trade secrets of an American leader in computer memory to enable China to achieve a strategic priority: self-sufficiency in computer memory production without spending its own time or money to earn it,” Deputy Attorney General Jeffrey A. Rosen said in a statement.

UMC said in a statement that its management was unaware of and did not authorize actions taken by three of its employees who had previously worked for Micron.

One of the employees input trade secret information from Micron into an early draft of UMC's design rules for a DRAM project it was working on with Fujian Jinhua, it said.

UMC added it never planned to and did not transfer Micron trade secrets or any unauthorized third-party information to Fujian Jinhua.

The U.S. alleges Fujian Jinhua used the trade secrets in its memory chip designs. Its indictment against the state-owned firm remains unresolved.

Fujian has previously denied wrongdoing. Reuters was not able to reach a company representative by phone or fax on Thursday for comment.

In late 2018, the U.S Department of Commerce added Fujian Jinhua to its so-called “entity list,” in effect barring U.S. suppliers from selling to it. The company has since halted chip production plans, analysts have said.