China says products made by US memory chip giant Micron Technology are a national security risk.
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.
The long-running dispute has seen Washington impose a series of measures against Beijing’s chip making industry and invest billions of dollars to boost America’s semiconductor sector.
In a statement, the Cyberspace Administration of China (CAC) said: “The review found that Micron’s products have serious network security risks, which pose significant security risks to China’s critical information infrastructure supply chain, affecting China’s national security.”
The CAC did not give details of the risks it said it had found or in which Micron products it had found them.
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.
“This action, along with recent raids and the targeting of other American firms, is inconsistent with [China’s] assertions that it is opening its markets and committed to a transparent regulatory framework.”
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, Micron clients in China run the danger of switching to the company’s rivals Samsung and SK Hynix, both of which are based in South Korea, according to CJ Muse, an analyst at Evercore ISI.
He added that the US had advised South Korea not to make up for any shortages in China.
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.
It also has manufacturing facilities in the country.
The CAC’s announcement came a day after a G7 leaders meeting in Japan issued a joint statement which criticized China, including its use of “economic coercion”.
On Sunday, US President Joe Biden said G7 nations were looking to “de-risk and diversify our relationship with China”.
“That means taking steps to diversify our supply chains,” he added.
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.
