China has said products from US chipmaker Micron Technology pose “serious network security risks” as it bars operators of key infrastructure from buying them, in its first major action against a US semi- drivers.
China’s Cyberspace Administration said on Sunday that the company, which is America’s largest memory chip maker, “poses significant security risks to China’s critical information infrastructure supply chain.” . As a result, he ordered “national critical infrastructure operators” to stop buying products from Idaho-based Micron.
The move follows a seven-week investigation into Micron by the CAC, an investigation that was widely seen as retaliation for U.S. efforts to restrict China’s access to key technology. Last October, Washington introduced sweeping chip export controls and the Netherlands and Japan have since followed suit.
Analysts said Micron presented an obvious early target for Beijing, as its technology would be more easily replaced by competing chips from South Korean rivals Samsung and SK Hynix. Last month, the White House asked South Korea to urge its chipmakers not to fill any market gaps in China if the sale of Micron products were restricted.
China is an important market for Micron. Mainland China and Hong Kong generated 25% of its $30.8 billion in revenue last year, according to a person familiar with the matter.
Paul Triolo, Chinese technology expert at consultancy Albright Stonebridge, said: “This could be really bad for Micron. It depends on the scope of the Chinese definition of critical information infrastructure, but it could include the financial sector, transport, energy and data centers.
He added that data centers were a particularly important customer for Micron memory chips.
Beijing’s edict comes a day after G7 leaders sternly rebuked China at the annual meeting of world leaders in Hiroshima, decrying its human rights record, “non-market” economic policies and its growing military assertiveness in the East and South China Seas.
Micron chief executive Sanjay Mehrotra was part of a delegation of business leaders who attended the G7 summit. He had dinner with US Ambassador to Japan Rahm Emanuel and Citi chief Jane Fraser on Saturday night in the Japanese coastal city.
“We have received notice of conclusion from the CAC regarding its review of Micron products sold in China,” Micron said in a statement. “We are evaluating the conclusion and evaluating our next steps. We look forward to continuing our discussions with the Chinese authorities. »
China informed Micron of its decision at a meeting in Beijing on Sunday, according to a person familiar with the matter.
“It’s new for China,” Triolo said of Micron’s ban. “That he doesn’t take some of the US steps (to limit China’s access to technology) by lying down.”
In its statement, the CAC said that “China welcomes global enterprises and various platform products into the Chinese market as long as they comply with Chinese laws and regulations.” The regulator’s statement did not provide any information about the “safety risks” posed by Micron’s products.
Analysts have warned that Beijing’s restrictions could even prompt Chinese companies that don’t provide “critical information infrastructure” to seek to eliminate Micron from their supply chains.
“The blast radius could be much bigger,” Triolo said.