United Microelectronics Corporation, Inc. (“UMC”), a Taiwanese semiconductor foundry and the world’s fourth largest contract chipmaker, pleaded guilty on October 28, 2020, to criminal trade secret theft, will pay a $60 million fine – the second largest ever in a criminal trade secrets case – and will cooperate in the investigation and prosecution of its co-defendant, a Chinese state-owned enterprise.

In September 2018, a federal grand jury indicted UMC, Fujian Jinhua Integrated Circuit Co. (“Fujian Jinhua”), and three individuals for conspiracy to steal, convey, and possess stolen trade secrets of American semiconductor company Micron Technology relating to computer memory. The indictment reveals that UMC obtained Micron’s intellectual property and took steps to conceal their theft, including use of two “off network” laptop computers that allowed them to access Micron’s confidential information without further detection and hid papers, notes, USB drives, and personal phones and computers from the Taiwanese authorities. Following raids by Taiwanese authorities of UMC’s offices, one of the individual defendants left UMC and became president of Fujian Jinhua, taking charge of its memory production facility. Fujian Jinhua previously denied wrongdoing. An October 28, 2020 DOJ press release states that “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.”

UMC, in an October 29, 2020 press release, stated it “takes full responsibility for the actions of its employees, and [is] pleased to have reached an appropriate resolution regarding this matter.”  As for the co-defendants, DOJ expects to proceed to trial in 2021. Fujian Jinhua is already banned from receiving any American technology following the 2018 indictment and faces potential fines.

Check back with Crowell & Moring’s Trade Secrets Trends blog for updates.