What drives YMTC's bold legal action against Micron?

Staff reporter, analysis; Willis Ke, DIGITIMES Asia 0

Credit: YMTC

China's Yangtze Memory Technologies (YMTC) has filed a patent infringement lawsuit with a US court against American chipmaker Micron Technology, marking the first time a Chinese chipmaker has challenged an American counterpart under the current tense relationship between the semiconductor industries of both countries. This bold move by YMTC has raised several questions, including what motivated the lawsuit, what the possible outcomes are, and what the impact could be on the future landscape of semiconductor tech competition.

YMTC is accusing Micron of infringing on eight of its patents, which were released between 2020 and 2023. The patents cover YMTC's Xtacking 3D NAND technology, which is crucial for the production of high-density flash memory chips.

YMTC's lawsuit is a bold action that suggests it has immense confidence in its tech prowess and patent rights. It is also a sign that the Chinese memory chipmaker is no longer willing to take a roundabout and low-profile approach, but will stand up and fight for its rights.

Moreover, the legal action appears strategic, coinciding with the upcoming APEC leadership summit, and potentially intended for YMTC to secure a more advantageous position in the bilateral tech war or gain more bargaining chips in future tech trade negotiations.

Micron's trade ban in China imposed in May by the Cyberspace Administration of China (CAC) due to cybersecurity concerns has constrained its chip sales in China. But the company made its first appearance at the Sixth China International Import Expo (CIIE) held November 5-10 in Shanghai, allowing the outside world to witness a shift in stance by the usually assertive American chipmaker, demonstrating its willingness to compromise with the reality.

Tacit government approval and support

The fact that YMTC has pursued legal action within the US jurisdiction implies a bold confidence in its technological prowess and patent rights, potentially backed by tacit approval and support from the Chinese government. The company's accumulation of patents over the years signifies a robust arsenal for defense and a show of strength in the face of adversity.

Moreover, the request for a jury trial by YMTC serves as a testament to the company's aim for a fair and impartial verdict, avoiding potential subjective judgment from a single judge.

Yet, challenges loom. YMTC's placement on the Entity List by the US Department of Commerce raises questions about the company's eligibility for patent claims and could heavily influence the lawsuit's outcome.

The lawsuit's progress and ultimate result hold weight not only for YMTC but also for the broader Chinese semiconductor industry. Chen Nanxiang's position as YMTC's chairman and head of the China Semiconductor Industry Association intensifies the significance of the lawsuit's outcome for the industry as a whole.

Chen, a seasoned figure in the semiconductor sector, has long advocated for the Chinese semiconductor industry's advancement. His bold stance and unyielding approach, exemplified in previous statements and actions, reflect the determination to reduce reliance on foreign equipment.

YMTC has been committed to promoting domestic alternatives in recent years underscoring the industry's shift away from foreign dependency. The potential outcome of the lawsuit against Micron could significantly impact the future dynamics between Chinese and American semiconductor companies.

The lawsuit is not merely a legal battle; it's a testament to the evolving power dynamics in the semiconductor industry, echoing a pivotal point where technological prowess, legal strategies, and international relations converge.