China said products from U.S. chipmaker Micron Technology posed a “serious cybersecurity risk” as it banned operators of critical infrastructure from buying them, in its first major move against the U.S. semiconductor group.
China’s Cyberspace Administration of China announced on Sunday that the company, the largest maker of memory chips in the United States, “poses a significant security risk to China’s critical information infrastructure supply chain.” As a result, it ordered “critical national infrastructure operators” to stop sourcing products from Idaho-based Micron Technology.
The move follows a seven-week investigation by the CAC into Micron that was widely seen as retaliation for U.S. efforts to curb China’s access to key technologies. In October, Washington introduced broad chip export controls, with the Netherlands and Japan following suit.
Analysts said Micron was an obvious top target for Beijing, as its technology would be more easily replaced by 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 sales of Micron products were curbed.
China is an important market for Micron. China and Hong Kong contributed 25% of its $30.8 billion in revenue last year, according to a person familiar with the matter.
“It could be really bad for Micron,” said Paul Triolo, a China technology expert at consultancy Albright Stonebridge. “It depends on how broad China’s definition of critical information infrastructure is, but that could include the financial sector, transportation, energy and data center.”
Data centers are a particularly important customer for Micron’s memory chips, he added.
Beijing’s release comes after leaders of the Group of Seven nations lashed out at China during the annual meeting of global leaders in Hiroshima, denouncing China’s human rights record, “non-market” economic policies and increasingly assertive military assertiveness in the East and South China Seas. a decree.
Micron CEO Sanjay Mehrotra was part of a delegation of business leaders attending the G7 summit. On Saturday night, he had dinner in the Japanese coastal town with Rahm Emanuel, the US ambassador to Japan, and Jane Fraser, the chief executive of Citi.
Micron said in a statement: “We have been notified of the conclusions of the CAC’s review of Micron products sold in China.” “We are reviewing the conclusions and assessing our next steps. discuss.”
China informed Micron of its decision at a meeting in Beijing on Sunday, according to a person familiar with the matter.
“This is new to China,” Triolo said of the Micron ban. “It doesn’t take some of the U.S. actions (to curb China’s access to technology).”
The Cyberspace Administration of China said in a statement that “as long as it complies with Chinese laws and regulations, China welcomes global companies and various platform products to enter the Chinese market.” The regulator’s statement did not provide any information on the “safety risks” Micron’s products pose.
Analysts have warned that Beijing’s restrictions could even prompt Chinese companies that do not provide “critical information infrastructure” to seek to remove Micron from their supply chains.
“The blast radius could be much larger,” Triolo said.