Taipei, Oct. 31 (CNA) United Microelectronics Corp. (UMC), the second-largest contract chipmaker in Taiwan, on Wednesday made an about turn, suspending its partnership with Fujian Jinhua Integrated Circuit Co. of China after the latter was cut off from American suppliers.
Just the day before, UMC had said the partnership remained intact and that the two companies would continue their joint research and development efforts, despite the U.S.' decision to restrict American suppliers from doing business with Fujian Jinhua.
On Wednesday, however, UMC said it will halt the cooperation until the restrictions against Fujian Jinhua are lifted, in compliance with a directive it received from Taiwan's Bureau of Foreign Trade, but it did not elaborate.
The U.S. Department of Commerce (DOC) said Monday that it was taking action to restrict technology exports to the Chinese IC firm, amid allegations of intellectual property infringement.
Fujian Jinhua "poses a significant risk of becoming involved in activities that are contrary to the national security interests of the United States," the DOC said.
"Jinhua is nearing completion of substantial production capacity for DRAM integrated circuits," the DOC said. "The additional production, in light of the likely U.S.-origin technology, threatens the long-term economic viability of U.S. suppliers of these essential components of U.S. military systems."
Under the U.S. restrictions, American firms must obtain a license to export components, software and technology to Fujian Jinhua, according to the DOC.
In May 2016, UMC was commissioned by Fujian Jinhua to develop DRAM technology. Under the partnership arrangement, UMC uses Fujian Jinhua's DRAM production equipment, while the Chinese firm pays UMC for technology research and development.
