When Sino-US Memory Patent War is reconciled, does Micron merge Chinese memory manufacturer Jinhua?

Introduction: How did Jinhua and Micron finally solve memory patent contradictions? According to current reports, Micron and Jinhua have reached a settlement that Micron will merge Jinhua. But don't be too happy. This news is supposed to be a joke, but it is really a way to solve disputes between China and the United States.

In 2018, Chinese integrated circuit(IC) imports exceeded $300 billion for the first time, of which memory chips accounted for at least one third. In fact, with negligible domestic rate, memory chips are almost entirely dependent on imports. Memory chip has been a priority in the field of semiconductor chips in recent years. There are three major memory camps in China, namely YMTC in NAND flash, CXMT and GigaDevice in DRAM flash, and Jinhua together with UMC. However, a series of contradictions broke out between Jinhua/UMC and Micron, from competition for talents to patent disputes, so that the Unite States came out to sanction Jinhua and UMC. How did Jinhua and Micron finally solve memory such contradictions? According to current reports, Micron and Jinhua have reached a settlement that Micron will merge Jinhua. But don't be too happy. This news is supposed to be a joke, but it is really a way to solve disputes between China and the United States.

Micron's acquisition of Jinhua was only spread in Wechat friends Circles, and no relevant reports were found in foreign media, so this statement is just a rumor. It is not now that Jinhua resolved the dispute with Micron. It has been reported that patent disputes between Micron and Jinhua were also a topic of Sino-US trade negotiations, and both sides have found a way to reconcile. However, their negotiations have not been officially announced, so the joke cannot be confirmed yet.

Is it possible to resolve the dispute between Micron and Jinhua? There are many possibilities. If Micron insists on killing Chinese Jinhua, it is possible. In addition, with the sanctions imposed by the US government, Jinhua cannot buy a lot of critical production equipment, even if it’s supported by Chinese government funds. Thus, it is possible that Jinhua can’t survive.

In fact, Micron and the US government should also understand that Chinese determination to develop semiconductors will not disappear. Other memory companies will still be invested even if Jinhua hangs up. If insisting on killing Jinhua with the help of the US government, Micron may also encounter obstacles in China, the world’s largest semiconductor market.

As a result, reconciliation is the only choice. Micron accused Jinhua of patent infringement. As we all know, patent infringement is often just a cover. The most choice is reconciliation between both sides in all cases of patent infringement around the world.

The reason why Jinhua cooperated with UMC is that Jinhua did not have DRAM memory development capability. Samsung, SK Hynix, Micron and others could not authorize this technology to Chinese companies at that time. So Jinhua chose to cooperate with UMC. But this cooperation seems to be a failure now. UMC claimed to have abundant DRAM memory technology, but actually its technology was more than 20 years ago, which means new DRAM technology still need to be developed.

According to public reports, Jinhua provided earnings and equipment for UMC, while UMC developed technology in Taiwan. Obviously, the initiative was in UMC. In order to speed up the development, many of the R&D personnel from Inotera and other companies were recruited by UMC. Interestingly, Inotera has been wholly acquired by Micron in the past two years. Contradictions between Micron and Jinhua were mainly caused by this issue.

Jinhua's choice is theoretically the most time-saving, compared with YMTC and CXMT developing flash technology by themselves. It’s a pity that Jinhua goes out for wool and come home shorn. After being sanctioned by the United States, UMC stopped developing memory technology for Jinhua. It turns out that such a choice of Jinhua is not reliable.
Now the question is how Micron and Jinhua solved the problem? Jinhua has restrained itself after being sanctioned. It is rumored that its business is now suspended. Although there were many reports that Jinhua tried to reconcile with Micron in the past, they are unilateral and not confirmed.

It is impossible for Micron and Jinhua to solve the contradictions by themselves without the help of Sino-US trade negotiations. Previous rumors mentioned that China has promised to buy 200 billion American chips in six years, but asked American companies to package them in China. This proposal is a win-win result.

Considering the complementarity between China and the United States in the semiconductor industry, it is indispensable for China to continue to purchase a large number of American chips, but to require American companies to transfer production and testing to China. Actually, Micron didn’t merge Jinhua but cooperate with Jinhua. Jinhua purchased Micron DRAM technology authorization, and invested in the form of factories, land and other ways to produce DRAM chips for Micron.

In the global DRAM market share, Samsung is 40% to 45% and SK Hynix is about 30%, while Micron is 20% to 25%, the least among the three camps. Micron has enhanced investment and productivity in recent years, but its overall strength is still not as good as Samsung and SK Hynix. If its reconciliation with Jinhua comes true this time, Micron will also expand production capacity and market share. The result will be win-win.