PDF

United Microelectronics Corporation

20 days left to seek lead plaintiff status

Case Summary

Company Name
United Microelectronics Corporation
Stock Symbol
UMC
Class Period
October 28, 2015 to November 1, 2018
Motion Deadline
May 13, 2019
Court
Southern District of New York

The complaint charges United Microelectronics Corp. (“UMC”) and certain of its officers with violations of the Securities Exchange Act of 1934.  UMC is engaged in the research, development, and manufacture of products in the solar energy and light-emitting diode industries.

On May 13, 2016, the Company announced that it had entered into a Dynamic Random-Access Memory (“DRAM”) Technology Cooperation Agreement with Fujian Jianhua Integrated Circuit Co. Ltd. (“Fujian”).  DRAM is a memory device product that is widely used in digital electronics, as well as in leading-edge computing, consumer, networking, automotive, industrial, embedded, and mobile production.  Under the agreement, Fujian was to provide UMC with related equipment for its research and development, as well as service fees subject to the progress of the technology development.  UMC was to develop DRAM-related technologies for Fujian and deliver such development results to Fujian before May 12, 2021.  The developed technologies were to be jointly owned by both parties.  One of UMC’s primary competitors is Micron Technology, Inc. (“Micron”), a leading U.S. semiconductor company known for its development and production of DRAM products.

The complaint alleges that, throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding UMC’s business and operations.  Specifically, defendants concealed that UMC had conspired with Fujian to steal trade secrets from Micron relating to its research and development of DRAM products, that UMC hired former Micron employees for the purpose of stealing this information from Micron, and that the foregoing conduct placed UMC and certain of its employees at an increased risk of criminal and regulatory investigation by the U.S. government.  As a result of this information being withheld from the market, UMC American Depositary Shares (“ADSs”) traded at artificially inflated prices of more than $3.00 per share during the Class Period.

On November 1, 2018, the U.S. Department of Justice (“DOJ”) indicted UMC, Fujian, and Chen Zhengkun, a/k/a Stephen Chen (“Chen”), a former Micron employee hired by UMC, for conspiracy to commit economic espionage, conspiracy to commit theft of trade secrets, and economic espionage (receiving and possessing stolen trade secrets).  The indictment stated that the companies conspired to steal trade secrets from Micron relating to its research and development of memory storage devices.  According to the indictment, the conspiracy to commit economic espionage began in or around January 2016, the conspiracy to commit theft of trade secrets began in or about October 2015, and the economic espionage (receiving and possessing stolen trade secrets) began in or about February 2016.

According to the DOJ’s indictment, Chen, a Taiwanese national, resigned as the President of Micron’s Micron Memory Taiwan Co., Ltd. subsidiary in July 2015.  In September 2015, Chen began working for UMC as its Senior Vice President and Fabrication Director in Taiwan.  The indictment alleges that Chen, as well as agents of UMC, later hired additional former employees of Micron who stole Micron trade secrets and, at the direction of UMC employees, used such trade secrets to enhance UMC’s DRAM technologies.  As news of UMC’s indictment reached the market, the price of UMC ADSs fell by $0.19 per share, or nearly 10%, over the following two trading sessions to close at $1.71 per share on November 5, 2018.

Class Period: October 28, 2015 - November 1, 2018
Main Menu