China claims that US memory chip manufacturer Micron Technology’s goods pose a threat to national security.
The nation’s cyberspace authority declared on Sunday that the nation’s top memory chip manufacturer presents “serious network security risks.”
It implies that the company’s goods won’t be allowed in significant infrastructure projects in the second-largest economy in the world.
As tensions between Beijing and Washington rise, it is China’s first significant action against a US semiconductor manufacturer.
The declaration is the most recent phase in a dispute between the US and China that is getting worse over technology that is essential to economies all across the world.
As a result of the protracted disagreement, Washington has taken a number of steps to restrict Beijing’s chip manufacturing industry and invested billions of dollars to expand the semiconductor industry in the United States.
China claims that US memory chip manufacturer Micron Technology’s goods pose a threat to national security.
The nation’s cyberspace authority declared on Sunday that the nation’s top memory chip manufacturer presents “serious network security risks.”
It implies that the company’s goods won’t be allowed in significant infrastructure projects in the second-largest economy in the world.
As tensions between Beijing and Washington rise, it is China’s first significant action against a US semiconductor manufacturer.
The declaration is the most recent phase in a dispute between the US and China that is getting worse over technology that is essential to economies all across the world.
As a result of the protracted disagreement, Washington has taken a number of steps to restrict Beijing’s chip manufacturing industry and invested billions of dollars to expand the semiconductor industry in the United States.
The price of Micron’s stock fell 5.3% in US pre-market trading.
The investment banking firm Jefferies’ analysts predicted that “the ultimate impact [of the ban] on Micron will be quite limited” because the company does not rely on the Chinese government or telecommunications for the majority of its domestic sales.
The majority of Micron’s semiconductor clients in China are found in mobile devices and desktop computers.
However, CJ Muse, an analyst at Evercore ISI, warned that there was a chance that Micron’s Chinese clients would switch to the company’s competitors Samsung and SK.
Meanwhile, the US has asked South Korea not to make up for any shortages in China,” he said.
For Micron, China is a crucial market, accounting for 10% of annual sales. Micron recorded total revenue of $30.7 billion (£24.6 billion) in 2022, of which $3.3 billion originated in mainland China.
Additionally, it has manufacturing operations there.
The CAC made its pronouncement a day after a joint statement from the G7 leaders’ conference in Japan, which chastised China for its use of “economic coercion” among other things.
US Vice President Joe Biden stated that the G7 countries were seeking to “de-risk and diversify our relationship with China” on Sunday.
That requires action to diversify our supply networks, he continued.
Sanjay Mehrotra, the CEO of Micron, went to the summit in Hiroshima with a group of business executives.
The business announced last week that it would spend about 500 billion yen ($3.6 billion; £2.9 billion) to advance technology in Japan.
