China will investigate US chipmaker Micron’s products for cyber security risks

March 31 (Reuters) – China’s cyberspace regulator will conduct a cybersecurity review of products sold in the country by U.S. memory chip maker Micron Technology Inc ( MU.O ), the regulator said on Friday.

The move, which comes amid a spat over chip technology between Washington and Beijing, is aimed at protecting the security of the supply chain for critical information infrastructure, preventing hidden risks and safeguarding national security, the Cyberspace Administration of China said in a brief statement.

It did not provide any other details, including which Micron products it was considering.

The US has imposed a series of export controls on chip technology to China over fears it could be used to produce chips for applications such as artificial intelligence that could be used by China’s military, and blacklisted a number of China’s biggest chip firms, including Micron rival Yangtze Memory Technologies Co Ltd .

Micron, one of the world’s largest memory chip makers, did not immediately respond to a request for comment. The company’s shares fell 3% to $61.15 on Friday.

“Punitive actions against Micron could signal a broader shift in China policy with other US suppliers with large Chinese exposure now potentially at risk of similar actions,” said Wedbush Securities analyst Matthew Bryson.

On Friday, Japan announced it would align its technology trade controls with a US push to limit China’s ability to make advanced chips. The Netherlands, which makes advanced lithography equipment critical to the production of advanced chips, made a similar announcement earlier this month.

Weak consumer demand has decimated the memory chip market, which is dominated by South Korea’s Samsung Electronics ( 005930.KS ).

Micron derives about 10% of its revenue from China, but it was not clear whether the review would affect the company’s sales to non-Chinese customers in the country.

Most of the company’s products flowing into China are bought by non-Chinese firms for use in products manufactured in the country, according to analysts.

Micron has offices in Shanghai and Shenzhen, as well as a chip packaging plant in the city of Xian. In early 2022, the company announced that it would close its DRAM design business in Shanghai.

Reporting by Ella Cao, Meg Shen, Brenda Goh and Chavi Mehta; Additional reporting by Josh Horwitz; Editing by David Goodman, Mark Potter and Shounak Dasgupta

Our standards: Thomson Reuters Trust Principles.

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