China bans major chip maker Micron from key infrastructure projects

  • By Peter Hoskins
  • Business reporter

China says products made by US memory chip giant Micron Technology pose a national security risk.

The country’s cyberspace regulator announced on Sunday that the US’s biggest maker of memory chips poses “serious network security risks”.

This means that the company’s products will be banned from important infrastructure projects in the world’s second largest economy.

It is China’s first major move against a US chip maker as tensions rise between Beijing and Washington.

The announcement is the latest development in a deepening dispute between the US and China over the technology that is vital to economies around the world.

The long-running dispute has seen Washington take a series of measures against Beijing’s chip manufacturing industry and invest billions of dollars to boost the US semiconductor sector.

The CAC did not provide details about the risks it said it had found or in which Micron products it had found them.

A Micron spokesperson confirmed to the BBC that the company had “received the CAC’s notice following its review of Micron products sold in China”.

“We are evaluating the conclusion and considering our next steps. We look forward to continuing to engage in discussions with the Chinese authorities,” they added.

In response, the US government said it would work with allies to address what it called “distortions to the memory chip market caused by China’s actions”.

“We strongly oppose restrictions that have no basis in fact,” said a spokesperson for the US Commerce Department.

“This action, along with recent attacks and targeting of other US firms, is inconsistent with [China’s] claims that it opens its markets and commits to a transparent regulatory framework.”

Micron’s share price fell 5.3% in premarket trading in the US.

However, analysts at investment banking group Jefferies said “the ultimate effect [of the ban] on Micron will be quite limited” because it does not rely on the Chinese government or telecommunications for most of the sales it generates in the country.

Nevertheless, China is a key market for Micron and generated about 10% of full-year sales. In 2022, Micron reported total revenues of $30.7 billion (£24.6 billion), of which $3.3 billion came from mainland China.

It also has production facilities in the country.

On Sunday, US President Joe Biden said the G7 nations were looking to “de-risk and diversify our relationship with China”.

“That means taking steps to diversify our supply chains,” he added.

Micron CEO Sanjay Mehrotra attended the Hiroshima summit as part of a group of business leaders.

Last week, the company said it would invest about 500 billion yen ($3.6 billion; £2.9 billion) to develop technology in Japan.

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