Fujian Jinhua Exonerated in 2024, Valued at RMB 80 Billion, Plans 60,000 Wafer Capacity by 2026

Jinjiang, a city in Fujian known for sports shoes, hides a super unicorn in the memory chip sector: Fujian Jinhua Integrated Circuit Co. , Ltd. (Fujian Jinhua). In February 2016, Jinhua was registered in Jinjiang with registered capital of RMB 34.477 billion, funded by provincial, municipal, and county-level state-owned enterprises including Fujian Electronics & Information Group, Quanzhou Financial Holding Group, and Fujian Jinjiang Industrial Development Investment Group. The company was included in China's 13th Five-Year Plan for major integrated circuit productivity layout, aiming to break the decades-long monopoly of Samsung, SK Hynix, and Micron in the DRAM field. At that time, China had three memory projects: Yangtze Memory Technologies in Wuhan focused on NAND flash, ChangXin Memory Technologies in Hefei developed DRAM independently, and Fujian Jinhua planned to develop niche DRAM through cooperation with Taiwan's UMC.

Jinhua signed a technology cooperation agreement with UMC, under which Jinhua invested in building production lines and purchasing equipment, while UMC dispatched a core technical team to jointly develop 32nm DRAM technology. Jinhua provided USD 300 million for R&D equipment and paid UMC USD 400 million in stages, with the developed technology shared by both parties. In February 2017, Chen Cheng-kun became general manager of Jinhua. He had previously served as president of Micron's Taiwan subsidiary, responsible for manufacturing 25nm DRAM chips, and left Micron in 2015 to join UMC. According to the plan, the first phase involved a total investment of USD 5.3 billion, with production scheduled for the third quarter of 2018, targeting a monthly capacity of 60,000 12-inch wafers using 32nm process, with a final goal of 20nm products and a monthly capacity of 240,000 wafers by 2025 after four phases.

In September 2017, Micron sued UMC in Taiwan, alleging that employees who moved from Micron to UMC had stolen Micron's DRAM trade secrets. In December of the same year, Micron also filed a lawsuit against Jinhua and UMC in a US federal court in California. Jinhua countersued Micron for patent infringement in China and ultimately won. At the end of October 2018, the US Department of Commerce added Fujian Jinhua to the Entity List on national security grounds, meaning not only US companies but also global suppliers using US technology were prohibited from supplying Jinhua. Just one month later, the US Department of Justice formally indicted Fujian Jinhua, UMC, and Chen Cheng-kun, escalating the civil dispute to a criminal case with charges including conspiracy to commit economic espionage.

In October 2020, UMC reached a settlement with the US Department of Justice, admitting to infringing one trade secret, agreeing to pay a USD 60 million fine, and promising to cooperate with US government investigations into Jinhua during a three-year probation period. Two months later, a US court issued a global arrest warrant for Chen Cheng-kun. However, since neither mainland China nor Taiwan has an extradition treaty with the US, Chen remained in China and continued to lead R&D. The turning point came at the end of 2023, when Micron announced a global settlement with Fujian Jinhua, with both sides withdrawing lawsuits against each other worldwide and ending all litigation. On February 27, 2024, the US federal court in San Francisco ruled that prosecutors failed to prove Jinhua stole Micron's proprietary data, and all charges were dismissed.

Despite the eventual acquittal, the six-year accusation severely slowed Jinhua's progress. In January 2025, Chen Cheng-kun stepped down as general manager due to the expiration of his employment contract and became a technical advisor. After being placed on the Entity List, Jinhua faced the task of rebuilding a viable DRAM production line without US equipment and materials. It was rumored that initially about 70% of Jinhua's equipment depended on US supply; after being listed, Chen led the team to retrofit domestic equipment on the front line and reconstruct the entire production process logic. Jinhua significantly reduced the proportion of US technology in its equipment, stabilizing monthly capacity at about 40,000 12-inch wafers, with plans to expand to 60,000 by 2026. The company holds 1,007 related patents, covering the entire process from chip design to manufacturing.

DRAM is essentially a massive array of storage cells, each containing a transistor and a capacitor. Transistors can be made smaller, but capacitors are extremely difficult to shrink; once a capacitor becomes smaller, it is hard to hold charge stably, prone to leakage or interference from adjacent components. Building a state-of-the-art DRAM fab today requires an investment of USD 15-20 billion. DRAM is a commodity following the same industry standards; regardless of the manufacturer, chips can be directly used in any other vendor's equipment. After multiple rounds of consolidation, the global DRAM market has converged into an oligopoly of Samsung, SK Hynix, and Micron, with a combined market share exceeding 95%.

Jinhua focuses on the niche DRAM market, with products widely used in smart TVs, set-top boxes, printers, routers, industrial control equipment, and other fields. These products typically have a lifecycle of five to ten years, and once they enter the supply chain, they offer strong stability. Currently, Jinhua remains on the US Entity List, and at the end of 2024, the US Department of Commerce further tightened restrictions. In 2025, unofficial data indicated that Fujian Jinhua's valuation was approximately RMB 80 billion, though the accuracy of this valuation is unknown given the company has not raised capital in the market for a long time.

Jinjiang is a symbol of China's private economy, contributing over 90% of the city's GDP, with one in every seven residents being a business owner. Jinjiang's branded menswear output accounts for about 25% of the national total, sports shoes about 20% of global output, leisure food about 20% of the national total, and exterior wall ceramics about 60% of the national total. Brands such as Anta, Xtep, 361 Degrees, Hongxing Erke, Panpan, Hengan, Lilang, and Joeone all originate from this small city. Jinhua is the seed player in Jinjiang's integrated circuit industry. As support, in November 2017, the Fujian provincial government approved the establishment of the provincial-level Quanzhou Semiconductor High-Tech Industrial Park, comprising "one zone with three parks": the Jinjiang sub-park focuses on integrated circuits, the Nan'an sub-park on compound semiconductors, and the Anxi sub-park on LED-based optoelectronics.

Fujian state capital holds an absolute controlling stake of over 60% in Jinhua. During the five-year frozen trough, it did not withdraw capital, call in loans, disband the team, or stop paying salaries. Provincial and municipal governments provided full support, ensuring factory operations, utilities, and industrial resources continued. Jinjiang has established two industrial mother funds and 12 government guidance funds, forming two fund clusters with a total scale exceeding RMB 45 billion. In March 2025, Jinjiang set up a talent and technology innovation fund with a total scale of RMB 500 million, with an initial phase of RMB 50 million, focusing on new productive forces such as integrated circuits, nuclear technology applications, and intelligent equipment. With Jinhua as the leader, Jinjiang has attracted 52 integrated circuit industry chain projects with total investment exceeding RMB 100 billion, forming a full-chain industrial cluster covering chip design, manufacturing, packaging and testing, equipment and materials, supporting services, and terminal applications.

Over more than 20 years, Jinjiang's GDP increased from RMB 27.7 billion in 2002 to RMB 336.35 billion in 2023. In the first three quarters of 2024, Jinjiang's GDP reached RMB 249.46 billion, up 8.2% year-on-year, the fastest growth among the top five county-level economies in China. In the third quarter of 2025, the global DRAM market reached USD 40.037 billion, a record quarterly high. In this AI-driven memory super cycle, Jinhua's monthly capacity of 60,000 wafers and annual revenue of RMB 2 billion are limited in scale, but they represent the fact that a company placed on the Entity List has stood up again amid blockade.