Micron Technology, Inc. (MU) and United Microelectronics Corporation have agreed to globally withdraw their complaints against each other over intellectual property.
As per the agreement, United Micro will pay an undisclosed amount to Micron, following which both the companies seek to engage in mutual business cooperation opportunities.
Micron filed a lawsuit against United Micro for the violation of patent law after it noticed that the latter was producing DRAM products using its technology in 2017.
An investigation was carried out into the matter as a result of which United Micro pleaded guilty to the charges of IP theft and industrial espionage and was asked to pay a penalty of $60 million. (See Micron stock chart on TipRanks)
Further, the U.S Department of Justice filed a civil lawsuit to keep United Micro and Fujian Jinhua Integrated Circuit Co., a Chinese state-owned firm, away from cashing the stolen technology.
Recently, Mizuho Securities analyst Vijay Rakesh upgraded the rating on Micron to Buy from Hold and raised the price target to $95 from $75. The new price target implies upside potential of 10.2% from current level.
Rakesh is of the opinion that the demand for servers will improve in the first quarter of 2022 with Amazon and Google orders returning despite less than 10 weeks of DRAM inventory.
Based on 16 Buys, 5 Holds and 1 Sell, the stock has a Moderate Buy consensus rating. The average Micron price target of $97 implies 12.5% upside potential from current levels.
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Investors should always be aware of the risks involved in any stock. According to the TipRanks’ Risk Factors tool, MU is at risk mainly from two factors: Finance and Corporate, and Legal and Regulatory, which contribute 24% each to the total 38 risks identified for the stock.
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