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Micron confirms China blocking some chip sales, but says injunction will have minor impact on revenue

  • Micron confirmed on Thursday a court in China has granted a preliminary junction that bans its Chinese subsidiaries from selling some of its products in the Asian country.
  • The company said the affected products represent "slightly more than 1 percent" of its annual sales.
  • Micron added the injunction will hurt its current fiscal fourth quarter revenue by "approximately" 1 percent, but the chipmaker continues to expect sales to be within the previously guided range of $8 billion to $8.4 billion.
Sanjay Mehrotra, CEO, Micron Technology
Scott Mlyn | CNBC
Sanjay Mehrotra, CEO, Micron Technology

Micron confirmed on Thursday a court in China has granted a preliminary junction that bans its Chinese subsidiaries from manufacturing and selling some of its products in the Asian country.

The company said the affected products represent "slightly more than 1 percent" of its annual sales. Micron added the injunction will hurt its current fiscal fourth quarter revenue by "approximately" 1 percent, but the chipmaker continues to expect sales to be within the previously guided range of $8 billion to $8.4 billion.

United Microelectronics Corporation (UMC) and Jinhua sought the sales ban, alleging that Micron violated its patent rights in China. UMC and Micron have gone back and forth in the courts, alleging various intellectual property violations.

“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,” Micron's Joel Poppen, senior vice president of legal affairs and general counsel, said in a release.

“This ruling and other actions by the Fuzhou Court are inconsistent with providing a fair hearing through appropriate legal processes and procedures," the statement added. "Micron has a long-standing history of successful business operations in China, including a significant assembly and test manufacturing facility in Xi’an, as well as deep relationships with many valued China customers. Micron will continue to aggressively defend against these unfounded patent infringement claims while continuing to work closely with its customers and partners.”

The company's shares are up 2 percent Thursday.

Micron said the injunction relates to certain of its Crucial and Ballistix-branded memory modules and solid state drives sold in China.

On Tuesday, UMC released a statement claiming a Chinese court had temporarily banned sales of Micron chips in China. Micron shares closed down 5.5 percent that day.

Micron said UMC's and Jinhua's patent infringement claims in China were filed in retaliation for the company's U.S. civil lawsuit against the two companies.

— CNBC's Chloe Aiello contributed to this report.

This story is developing. Please check back for updates.