Chinese company charged with stealing trade secrets from US chipmaker

US Attorney General Jeff Sessions announced charges Thursday against Chinese and Taiwan companies for theft of business secrets from US chip giant Micron.

Jim Watson / AFP/Techhnews

Attorney General Jeff Sessions announced a new Department of Justice initiative on Thursday, designed to address Chinese cyberattacks and corporate spying on US companies. 

The new initiative comes as the Justice Department announced charges against Chinese chipmakers for stealing trade secrets related to semiconductor computer chips. 

China has continued hacking US companies despite a 2015 agreement between Chinese president Xi Jinping and President Barack Obama that banned government spying on industries, Sessions said at a press conference on Thursday.

“Obviously, that commitment has not been met,” he said.

Sessions said that a Chinese state-owned company, a Taiwan company and three Taiwanese individuals stole trade secrets from Micron, a chipmaking giant based in Idaho. 

The companies are Fujian Jinhua, a state-owned chip maker, United Microelectronics Corporation, a Taiwan semi-conductor foundry, and three Taiwanese nationals named Stephen Chen, 55, J.T. Ho, 42 and Kenny Wang, 44.

UMC is a publicly traded company on the New York Stock Exchange, and Chen served as a chairman of a company that Micron acquired in 2013, the Justice Department said.

He became the president of a Taiwanese branch under Micron, resigned in 2015 and brought trade secrets over to UMC and Fujian Jinhua, prosecutors said.

According to the indictment, the Taiwanese nationals downloaded more than 900 confidential files from Micron. Those trade secrets were worth “hundreds of millions, perhaps billions of dollars,” Alex Tse, the acting US attorney for northern California, said.

The indictment was filed on Sept. 27, and unsealed on Thursday. The Justice Department also filed a civil lawsuit to stop those stolen trade secrets from spreading, Sessions said.

The stolen secrets revolve around Dynamic Random Access Memory technology — which these Chinese companies did not have until the data theft, prosecutors said.

If convicted, each individual faces up to 15 years in prison and a $5 million fine.

The China initiative

The Justice Department’s new initiative is focused on deterring Chinese espionage, and protecting companies from having their trade secrets stolen.

“This initiative will identify priority trade theft cases and ensure we have enough resources dedicated to them,” Sessions said.

The initiative comes as the Justice Department sets its sights against China’s cyberattack efforts. While the focus has been on hackers from Russia and Iran, the US also views China as a major cybersecurity threat.

The Department of Commerce took similar actions on Monday when the agency restricted exports to Fujian Jinhua, calling the company a national security risk. On Tuesday, the Justice Department also announced charges against two Chinese intelligence officers and a team of hackers for stealing sensitive commercial aviation secrets and data.

The intelligence community also recommend against using devices from Chinese phone makers Huawei and ZTE.

Security researchers have warned for months about China ramping up its cyberattacks, with hackers targeting industries across the board, Dmitri Alperovitch, co-founder of cybersecurity firm CrowdStrike, said in a statement.

“China is back as the most prolific nation-state actor conducting industrial espionage via cyber and non-cyber means,” he said.

President Trump has also accused China of engaging in propaganda campaigns over social media similar to what Russia and Iran have done. Though lawmakers have pushed back on those allegations, asking Director of National Intelligence Dan Coats to provide evidence on Chinese interference in US elections. 

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