The headquarters building of Micron Technology Inc. stands in Boise, Idaho. Matthew Staver | Bloomberg | Getty Images

JINJIANG, China — With a dragnet closing in, engineers at a Taiwanese chip maker holding American secrets did their best to conceal a daring case of corporate espionage. As the police raided their offices, human resources workers gave the engineers a warning to scramble and get rid of the evidence. USB drives, laptops and documents were handed to a lower-level employee, who hid them in her locker. Then she walked one engineer's phone out the front door. What those devices contained was more valuable than gold or jewels: designs from an American company, Micron Technology, for microchips that have helped power the global digital revolution. According to the Taiwanese authorities, the designs were bound for China, where they would help a new, $5.7 billion microchip factory the size of several airplane hangars rumble into production. More from The New York Times:

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How Tech Companies Conquered America's Cities China has ambitious plans to overhaul its economy and compete head-to-head with the United States and other nations in the technology of tomorrow. The heist of the designs two years ago and the raids last year, which were described by Micron in court filings and the police in Taiwan, represent the dark side of that effort — and explain in part why the United States is starting a trade war with China. A plan known as Made in China 2025 calls for the country to become a global competitor in an array of industries, including semiconductors, robotics and electric vehicles. China is spending heavily to both innovate and buy up technology from abroad. Politicians in Washington and American companies accuse China of veering into intimidation and outright theft to get there. And they see Micron, an Idaho company whose memory chips give phones and computers the critical ability to store and quickly retrieve information, as a prime example of that aggression.

Kai Pfaffenbach | Reuters

Three years ago, Micron spurned a $23 billion takeover offer from a state-controlled Chinese company. Today it faces a lawsuit and an investigation in China, which accounts for about half its $20 billion in annual sales. Then Micron was the target of the heist in Taiwan, according to officials there and a lawsuit the company has brought against the Taiwanese company that employed the engineers, UMC, and the Chinese company it says wanted access to the technology, Fujian Jinhua Integrated Circuit Company. Other companies may face similar predicaments to Micron, industry experts said. One state-backed factory in the city of Wuhan, owned by Yangtze Memory Technology Company, or YMTC, will be turning out chips that look similar to those made by Samsung, the South Korean chip maker, said Mark Newman, an analyst at Sanford Bernstein. "The YMTC one is virtually identical to Samsung's, which makes it pretty clear they've been copying," Mr. Newman said. A Samsung spokeswoman declined to comment, and YMTC officials did not return calls for comment. Earlier this year, President Xi Jinping of China visited YMTC's production facilities, one way China's leaders show their endorsement for projects. China defends Made in China 2025 as necessary for its economic survival. It still depends on other countries for crucial goods like chips and software, and China is offering funding for homegrown labs and for entrepreneurs who hope to grab a piece of the future. But Trump administration officials in a report earlier this year recounted how Chinese officials have at times helped local companies get intellectual property from American firms, including in the energy, electronics, software and avionics sectors. American business groups worried about Made in China 2025 point to Micron. The account of its struggles was based on Taiwanese and American legal documents. In 2015, representatives from Tsinghua Unigroup, a Chinese chip maker with major state backing, approached Micron with an acquisition offer, which the company rejected. It later also turned down several partnership offers from Chinese companies out of concern for protecting its technology, said a person with knowledge of the situation, who asked not to be identified because the person lacked authorization to speak publicly. That was when one Chinese company resorted to theft, Micron said in documents filed last December in the Federal District Court for the Northern District of California. Micron's accusations focus on efforts by Fujian Jinhua Integrated Circuit, a state-backed chip maker, to build a $5.7 billion factory in China's Fujian Province. Two years ago, Jinhua tapped UMC, a Taiwanese company, to help it develop technology for the factory. Instead of going through the lengthy steps required to design the technology, Micron said in its suit, UMC and Jinhua decided to steal it. A UMC spokesman denied the allegations and declined to comment further. Jinhua did not respond to requests for comment.

Sanjay Mehrotra, CEO, Micron Technology Scott Mlyn | CNBC