Key facts
- China's Supreme People's Court upheld a lower court's injunction against Infineon Technologies.
- The ruling prohibits Infineon from selling gallium nitride (GaN) products in mainland China.
- Infineon was ordered to pay 10 million yuan (US$1.47 million) in damages for patent infringement.
- The dispute involved two core GaN patents held by Chinese rival Innoscience.
- The decision triggered a rally in Chinese semiconductor stocks, with Innoscience, Silan Microelectronics, Sanan Optoelectronics, and China Resources Microelectronics seeing significant gains.
Chinese compound chip stocks experienced a significant surge on Monday following a ruling by China's Supreme People's Court that upheld a lower court's injunction against German chipmaker Infineon Technologies. The dispute centers on gallium nitride (GaN) patents, with domestic rival Innoscience being the plaintiff.
The Supreme Court's decision affirmed a May injunction that found Infineon infringed on two core GaN patents held by Innoscience. As a result, Infineon is prohibited from selling its infringing GaN products in mainland China and has been ordered to pay 10 million yuan (approximately US$1.47 million) in damages.
This landmark patent case is expected to significantly impact China's third-generation semiconductor sector. The ruling triggered a rally in Chinese semiconductor material stocks, with Innoscience's Hong Kong-listed shares jumping 16.6%. Shanghai-listed Silan Microelectronics and Sanan Optoelectronics both reached their 10% daily trading limit, while China Resources Microelectronics saw its stock climb over 13%.