The Fuzhou Intermediate People's Court of the People's Republic of China issued a preliminary injunction stopping Micron from selling 26 products, which includes some dynamic random-access memory and NAND flash items.
The decision came after Taiwan-based chipmaker United Microelectronic Corporation (UMC) sued Micron for patent infringement. The court in China ordered Micron chips to be halted from being imported or sold in the largest economy in Asia, said sources at the court. It predicted this will not affect its outlook for the August-ending fiscal Q4 of $8 billion to $8.4 billion.
As of 11:42 a.m., shares of UMC had gained 0.56 percent to NT$18.05 (US$0.58), with 81.87 million shares changing hands, outperforming the broader market index, which was down 0.12 percent at 10,702.91.
Micron Technology Inc. said a ban on the sale of some of its products in China is unfair and won't hurt its earnings. The company said on Thursday that it expects to lose only one percent of its revenue because of the order, which was handed down by Fuzhou Intermediate People's Court in Fujian Province.
Shares in Micron dropped more than 5% in NY on Tuesday.
In response, UMC filed patent infringement lawsuits against Micron with the mainland China courts in January of 2018, covering three areas, including specific memory applications related to DDR4, SSD and memory used in graphics cards.
Micron makes big business from selling its products to China.
The ruling follows a recent raft of investigations by Chinese regulators into Micron and its South Korean rivals, SK Hynix and Samsung Electronics, on the grounds that the companies may be colluding to keep memory prices high.
Fujian Jinhua also issued a statement on Tuesday saying the court had ruled against Micron.
In December, Micron introduced a lawsuit in United States District Court for the Northern District of California that accused UMC of stealing trade secrets and giving the technology to Jinhua.
Other chipmakers also gained. The ban applies to its subsidiaries Micron Semiconductor (Xi'an) Co Ltd and Micron Semiconductor (Shanghai) Co Ltd.
China's aim may not be to bar shipments of Micron's chips, instead the ruling may be part of a strategy to push it into a partnership with Chinese semiconductor makers, which could speed up the country's internal chip industry development, according to Stifel Nicolaus analyst Kevin Cassidy.