Will Fujian Jinhua become the next ZTE?

On the evening of October 29, 2018, the U.S. Department of Commerce listed Fujian Jinhua on the list of entities unable to purchase components, software and technology products from U.S. companies on the grounds of security. Jinhua became the second banned Chinese company after ZTE. This time. The reason why Fujian Jinhua was banned is that the US government is worried that Fujian Jinhua will soon have the mass production capacity of dynamic random access memory (DRAM) integrated circuits. American companies also produce these chips and supply them to the U.S. military. Once Fujian Jinhua's production capacity comes up, the company will likely supply a large number of cheap chips to the market, US chip manufacturers will go bankrupt, and the military will lose a supplier of products from the United States.

Fujian Jinhua, full name "Fujian Jinhua Integrated Circuit Co., Ltd.", was established in February 2016. The overall background is state-owned assets. The major shareholders include Fujian Province, Jinjiang City, Quanzhou City, and China Development Bank. Among them, a series of executives including the chairman of the board, most of them are also enterprises with state-owned assets background. The registered capital of the company is as high as 11.445 billion yuan, and the total investment of the first phase construction project of the attachment Jinhua DRAM production line is currently under way has reached 37 billion yuan. At present, Fujian Jinhua and Taiwan Lianhua Electronics have signed a technical cooperation agreement to jointly develop DRAM-related manufacturing technologies. In the first wave of "Taiwan Semiconductor Wave" around 1990, Lianhua Electronics was involved in the production of DRAM memory particles. Although Taiwan United Power was hit by the financial crisis in 2008 and went into decline, Taiwan's research and development of semiconductor technology And the application is indeed at the world's leading level for a long time. According to the previously announced development plan, Fujian Jinhua officially put into production in September 2018, and is expected to produce 60000 12-inch wafers one month after production.

As for what prompted the US Department of Commerce to make such a ruling against Fujian Jinhua, it is hard not to think of a series of "moves" between Micron and Fujian Jinhua ". Because, in the context of the Sino-US trade war, it seems reasonable to start with Chinese technology companies, but under the premise of China's vigorous support for the semiconductor industry, the rising domestic memory particle manufacturers include Ziguang Group and Changjiang Storage, and the latter two The scale may be larger than Fujian Jinhua. The identity of the supplier mentioned by the U.S. Department of Commerce should be Meiguang. And there are some lawsuits between Micron and Fujian Jinhua and Taiwan Liandian.

In December 2017, Micron accused Taiwan's UMC and Fujian's Jinhua of stealing its own memory chip technology in California. Micron alleges that two former employees of Micron stole the company's technical information through flash drives and then handed it to the executives of its new owner, Taiwan Liandian, who will also share the technology with Fujian Jinhua. At present, there is still no updated progress in the United States case. On January 19 this year, Fujian Jinhua also filed a lawsuit against Micron Technology on the grounds that it had infringed the patent and requested compensation of RMB 0.196 billion. On July 3 this year, it was ruled that Micron Semiconductor Sales (Shanghai) Co., Ltd. immediately stopped selling and importing more than ten Crucial Yingruida solid-state drives, memory chips and related chips, and deleted the advertisements and purchase links of the above products on its website. information. On the same day, Fujian Jinhua released the news of the ruling on the official website. At the same time, the news was forwarded by the current partner of Fujian Jinhua, Taiwan Liandian. The co-president of Taiwan United Power even came out directly and said, "Taiwan's UMC welcomes the court's ruling. Taiwan's UMC has invested heavily in intellectual property rights, and Taiwan's UMC will take full responsibility for companies that damage intellectual property rights." According to the research of "Patent Ark", the patents involved in Fujian Jinhua's lawsuit against Meguiar's are actually not Fujian Jinhua's own, but from Taiwan Liandian's patents. Taiwan Liandian transferred 25 patents to Fujian Jinhua on January 3 this year, and then Fujian Jinhua sued Meguiar's Fuzhou court on January 19. According to data from Meguiar's 2017 financial report, Meguiar's sales in China are as high as US $10.4 billion, accounting for nearly half of its global revenue. Banning the sale of several products in China can be quite a painful blow.

According to the data of patent search, there is still a huge gap between the two sides in the number of patents. Micron has applied for more than 9000 patents in the field of memory. Micron has applied for patents since 1988. After a short period of six years, its patent application volume has been basically the same as that of industry giant Samsung, and has been maintained at about 400 applications per year since 1997. Fujian Jinhua was established in 2016. Up to now, it has submitted 42 patent applications in China and 20 patent applications in the United States. The technical field of only opinion patent applications is G11C (static memory), and the technical field of other patent applications is H01L (semiconductor memory device). There is a big gap between Fujian Jinhua and Micron in terms of the number of patents, the distribution of technical targets, and the distribution of technical fields.

The impact of the ban on Fujian Jinhua may not be as pessimistic as imagined. At present, the world's largest exporter of semiconductor equipment for all kinds of semiconductor chips necessary for Fujian Jinhua is South Korea, followed by Taiwan, while the core lithography machines and other products are produced in Europe. A very small number of more advanced fields in the United States can also find alternatives in other countries. Meiguang's situation is more embarrassing, and the court injunction in July this year is still continuing to ferment. Under the overall background, it is unlikely that the sales restrictions will be lifted directly through appeals. In the end, it is likely to be forced to sit down with Fujian Jinhua and Taiwan United Power, just like ZTE, to negotiate and finally settle everything with the result of mutual patent authorization.

Therefore, the probability of Fujian Jinhua will not become the next ZTE, but it still needs to pay attention to the patent reserve in the field of memory. First of all, we should actively explore or introduce outstanding talents to achieve high-quality technological inventions, patent layout and patent application. Secondly, we should understand the development trend of technology, find the vacancy in technology research, and quickly enter the field through technical cooperation and patent licensing. Finally, as China and the United States are important markets for chips, major enterprises can submit patent applications in the United States, Japan, South Korea and other important chip market countries in combination with their own market planning when applying for patents, so as to escort the products to go out.

Source: Tiger Smell APP "Fujian Jinhua, Not the Second ZTE"