China says US controls on semiconductor firm break WTO rules

[GENEVA] The US decision to cut off a Chinese state-backed chipmaker from US suppliers amid allegations the firm stole intellectual property breaks World Trade Organization rules and aims to protect a US monopoly, China told a WTO meeting on Tuesday.

The meeting took place with the world's top two economies already locked in a trade dispute and tit-for-tat tariff war.

Last month the US Commerce Department put Fujian Jinhua Integrated Circuit Co Ltd on a list of entities that cannot buy components, software and technology goods from U.S. firms.

US semiconductor company Micron Technology Inc, a maker of memory chips with factories in Virginia and Utah, has accused Jinhua and Taiwanese partner United Microelectronics Corp of stealing its chip designs in a lawsuit in California.

"We consider this an unwarranted charge and firmly oppose the presumption of guilt to our companies," a Chinese official told the WTO, according to a transcript of remarks seen by Reuters.

Washington is concerned the Chinese firm could flood the market with cheap chips of the same type made by US companies that supply the US military.

Should the US chipmakers go out of business, the military would lose a supplier for an item that must come from the United States, presenting a national security threat.

The Chinese official said that Jinhua had not yet started production and was far from threatening DRAM (dynamic random access memory) circuit manufacturers in the United States.

"In our point of view, the real purpose of the U.S. measures is to maintain the monopoly interests of the US DRAM industry," he said.

A US official declined to comment when contacted by Reuters.

Jinhua and United Microelectronics countersued Micron in China, where courts sided with them and banned some of Micron's chips in China.

REUTERS