China has banned some sales of Micron’s products after launching an investigation into the US memory chip giant for cybersecurity risks in early April.
The decision is widely seen as part of a ‘spasm versus symbiosis’ in the ongoing economic competition between the US and China, which is beginning to upend the deeply intertwined global technology supply chain.
Last year, the US added state-backed Chinese firm Yangtze Memory Technologies to its Entity List, barring US companies from supplying it without approval. The US has also restricted Nvidia from exporting the H100, its state-of-the-art graphics processing unit (GPU) for AI training, to China.
China’s Cyberspace Administration on Sunday told local companies that provide “core information infrastructure” to stop buying from Micron. Micron’s products “have serious cybersecurity issues and pose a significant risk to the country’s major information supply chains, raising cybersecurity concerns.”
Micron, which opened its first factory in China 16 years ago, specializes in producing computer memory and data storage such as dynamic random access memory, commonly known as DRAM, and flash memory. China is its third largest market, accounting for 10.7% of its annual revenue in 2022. We’ve reached out to Micron for comment.
“Basic information infrastructure,” as China defines it, includes communications, energy, transportation, finance, defense, and any other area related to national interests.
The authority did not specify the ways in which Micron poses a cybersecurity risk, but it cited China’s Cybersecurity Law that took effect in 2016, a wide-ranging law aimed at strengthening government censorship of the internet, with rules such as real-name verification and storage of user data. local on local servers.
Micron projected its challenges in China in its 2022 annual report.
In particular, we face the risk of increased competition as a result of significant investment in the semiconductor industry by the Chinese government and several state-owned or affiliated entities, such as Yangtze Memory Technologies Co., Ltd. (“YMTC”) and ChangXin Memory Technologies, Inc. (“CXMT”), which aims to further China’s stated national policy goals. In addition, the Chinese government may restrict us from participating in the Chinese market or may prevent us from competing effectively with Chinese companies.
The ban could benefit Micron’s competitors in China, South Korean giants Samsung Electronics and SK Hynix. But the US has also urged South Korea not to fill the Chinese market for memory chips if Micron is banned, according to the Financial Times.
In response to the ban, the US Department of Commerce He said It will communicate directly with the Chinese authorities to detail the US position and will communicate with key allies and partners to address what it described as distortions in the memory chip market due to China’s actions.
In recent years, China has been strengthening its technological self-reliance in key industries such as advanced semiconductors, which has historically relied on foreign suppliers. For example, there has been pressure to replace foreign hardware and software with domestic alternatives via state-owned companies.