Micron Sees 1% Negative Impact to Revenue from China Ban

Micron Technology Inc. (NASDAQ: MU) on Thursday confirmed that the preliminary junction from a court in China will hurt its revenue this quarter by approximately 1%.

Fuzhou Intermediate People’s Court, Fujian Province, China, has granted a preliminary injunction that bans two Chinese subsidiaries of Micron from manufacturing and selling or importing certain Crucial and Ballistix-branded DRAM modules and solid-state drives in China. The patent infringement claims were filed by rivals United Microelectronics Corporation (UMC) and Fujian Jinhua Integrated Circuit Co.

Micron said the affected products account for slightly over 1% of its annualized revenues. The Company reaffirmed its sales to be within previously guided range of USD 8.0 Billion to USD 8.4 Billion.

“Micron is disappointed with the ruling by the Fuzhou Intermediate People’s Court. We strongly believe that the patents are invalid and that Micron’s products do not infringe the patents. The Fuzhou Court issued this preliminary ruling before allowing Micron an opportunity to present its defense” said Joel Poppen, Senior Vice President, Legal Affairs, General Counsel and Corporate Secretary at Micron Technology.

Micron shares rose 1.4% to USD 52.20 per share in the early trading on Thursday.

On Tuesday, UMC released a statement saying that the Fuzhou Court had banned Micron’s chips sales in China, sending Micron’s shares down 5.5% on closing that day.

“Micron will continue to aggressively defend against these unfounded patent infringement claims while continuing to work closely with its customers and partners,” Poppen said.

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