U.S. accuses Chinese and Taiwanese firms of stealing from chip giant Micron

Attorney General Jeff Sessions speaks during a news conference to announce a criminal law enforcement action involving China at the Department of Justice in Washington Thursday Nov. 1 2018

Attorney General Jeff Sessions announced criminal charges and an operation to thwart Chinese economic espionage. | AP

Tensions over trade have exacerbated relations between the two nations.

U.S. Attorney General Jeff Sessions told a news conference that Chinese espionage has been "increasing rapidly", saying that "cheating must stop". "We're not going to take it anymore", Sessions said.

The three individuals charged in the indictments are all former employees of Micron's Taiwan unit. They later went to work for United Microelectronics Corporation in Taiwan where they are alleged to have orchestrated stealing trade secrets from Micron.

Sessions said the Taiwanese company partnered with a Chinese state-owned firm so that ultimately China could steal this technology and use it to compete against the US.

"We see it time and again: Chinese actors have stolen wind turbine technology in Wisconsin, agricultural research in Kansas, cancer drug research in Pennsylvania, and software source code in NY", said Assistant Attorney General Brian A. Benczkowski in prepared remarks at the announcement.

Sessions is ordering the Federal Bureau of Investigation and the department's National Security Division, led by John Demers, to step up enforcement, the official said.

According to the DOJ, the three individual defendants face up to 15 years imprisonment and $5 million in fines on the espionage counts, with a further 10 years of possible jail time for trade secrets theft.

The foreign agents' effort will be to "counter covert efforts to influence our leaders and the general public", Sessions said. Those trade secrets were worth "hundreds of millions, perhaps billions of dollars", Alex Tse, the acting United States attorney for northern California, said.

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.

The charges filed on Thursday are the latest in a series of indictments that accuse China of elaborate efforts to steal corporate secrets through espionage and hacking.

Separately, Sessions a new Department of Justice initiative to combat Chinese economic espionage. All the three Taiwanese have been charged.

The indictment came four months after Fujian Jinhua won a patent dispute with Micron in a Chinese court, gaining an order for the USA company to stop sales in China of more than a dozen solid-state drives, memory sticks and chips. "The Chinese government's complicity in intellectual property theft hurts American manufacturers, workers, and consumers, and undermines the ability of USA businesses to operate in China", Senate Intelligence Committee Vice Chairman Mark Warner, D-Va., responded. It wants to keep working with China without sharing key technologies.

The Justice Department's announcement Thursday comes on the heels of several other major Chinese espionage cases in recent months.

The program will identify priority Chinese trade theft cases and see that they have enough people and funds and that they get high-level support.

The criminal case is USA v.

Dmitri Alperovitch, a cyber expert and chief technology officer at the cybersecurity firm CrowdStrike, said the Chinese military curtailed its commercialhacking in 2016, but that over the a year ago operatives affiliated with China's Ministry of State Security have increasingly taken up the slack, stealing military, medical, agricultural, high-tech and other secrets. In September 2015 Chinese President Xi Jin Ping pledged that China would not target USA companies for the economic benefit of nonmilitary Chinese companies.

Latest News