China bans chipmaker Micron from key infrastructure projects as tech row with US escalates | Economic news

Beijing escalated its row with Washington after it announced that products made by US memory chip giant Micron Technology posed a national security risk.

ChinaThe cyberspace regulator said on Sunday that following a review it found Micron products posed unspecified “serious network security risks” that pose a danger to the country’s information infrastructure. .

He told computer equipment users to stop buying products from the American company.

“The review found that Micron’s products pose serious network security risks, posing significant security risks to China’s critical information infrastructure supply chain, affecting the security of China,” the Cyberspace Administration of China said on its website.

CAC’s statement did not provide further details about the risk or which Micron products are considered a threat.

Micron said it received notice from the CAC regarding the conclusion of its review of the company’s products sold in China, and looked forward “to continuing to engage in discussions with Chinese authorities.”

The United States, Europe and Japan are cutting China’s access to advanced chip manufacturing and other technologies they say could be used in weapons.

Despite warning of unspecified consequences, Chinese officials appear to be struggling to find ways to fight back without harming the country’s smartphone producers and other industries.

Micron makes DRAM and NAND flash memory chips and competes with South Korea’s Samsung Electronics Co Ltd and SK Hynix Inc, as well as Japan’s Kioxia, a unit of Toshiba Corp.

The impact on Micron will be “limited”

Jefferies analysts said the company would see limited impact from the latest announcement because its main customers in China are consumer electronics companies such as smartphone and computer makers, not infrastructure providers.

“Since Micron’s DRAM and NAND products are much less present in servers, we believe that most of its revenue in China is not generated by telecom operators and the government. Therefore, the ultimate impact on Micron will be quite limited,” they said.

However, the company generated $5.2bn (£4.1bn) in revenue from China and Hong Kong last year, around 16% of its total revenue.

Learn more: The clumsy multipolar world of the West compared to the ever-rich developing countries

A formal review of Micron under China’s increasingly stringent information security laws was announced last month, hours after Japan joined Washington in imposing restrictions on Chinese access to the technology to manufacture processor chips for security reasons.

Micron last week announced a plan to invest up to 500bn yen (£2.9bn) in Japan in extreme ultraviolet technology, becoming the first chipmaker to bring manufacturing technology to advanced chips in the country which is now looking to reinvigorate its chip industry.

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China calls the G7 a ‘clique’

The timing of the CAC announcement was significant, with US President Joe Biden saying on Sunday that the G7 countries had agreed to “reduce risk and diversify our relationship with China”. They also agreed to set up an initiative to counter economic “coercion” at the summit in Hiroshima, Japan, this weekend.

Meanwhile, British Prime Minister Rishi Sunak said in his speech at the summit that China poses the world’s biggest challenge to global security.

He said China was the “only country with both the means and the intention to reshape the world order”.


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