A ruling by China’s Supreme People’s Court on Friday upheld a preliminary injunction issued by a lower court against the German firm in May.
A Chinese prohibition on German chip giant Infineon Technologies from selling gallium nitride (GaN) products in mainland China caused a surge in domestic semiconductor stocks on Monday, as the landmark patent conflict was anticipated to reshape the nation’s “third-generation” chip industry.
A statement from domestic competitor Innoscience confirmed that the Supreme People’s Court’s decision on Friday backed the lower court’s injunction, originally delivered in May.
According to the statement, the lower court determined that Infineon had violated two fundamental GaN patents held by Innoscience, directing it to halt all Chinese sales and imports of the infringing items immediately and to compensate with 10 million yuan (US$1.47 million) in damages.
Infineon did not respond to a request for comment on Monday.
The verdict sparked a rise in Chinese chip material stocks on Monday.
Innoscience’s Hong Kong-listed shares jumped 16.6 per cent. Shanghai-listed compound semiconductor producers Silan Microelectronics and Sanan Optoelectronics both hit the 10 per cent daily trading cap, while Star-market-listed power semiconductor firm China Resources Microelectronics climbed over 13 per cent.
The conflict represented a “system-level confrontation” vying for control of the third-generation semiconductor sector, stated Zhang Guobin, founder of Chinese chip website eetrend.com.