China Bans Micron Chips in Wake of Cybersecurity Review
official statement issued by China Cyberspace Administration (CAC) says operators of critical information infrastructure should “stop buying Micron products.” This law was discovered by wen yi leeannounced following a network security review of Micron products sold in China.
Apparently, a Chinese government security review found that “Micron’s products have relatively serious potential network security problems, posing serious security risks to our country’s critical information infrastructure supply chain.” It seems However, it does not detail the specific security he risks posed by using Micron’s products. As a matter of “national security,” the ban on Micron products is expected to be implemented swiftly and thoroughly.
At the end of its statement, the CAC said it welcomes any company from any country to enter the Chinese market as long as it complies with local laws and regulations. Again, no hint was given as to how US-based Micron broke the regulations.
Without the details behind Micron’s claims, it’s natural to wonder if China has political and/or economic motives for banning the company’s products. Therefore, it is worth taking a look at recent Micron and China news to get the background to this decision.
First, consider the political background. Additional US trade restrictions, which came into force last October, meant that China’s emerging DRAM and NAND giants (Yangtian Memory Technologies YMTC and Changxin Memory Technologies CXMT, respectively) had a much narrower market to address. The biggest visible impact of last year’s US government decision was when, after a period of close cooperation, Apple had to abandon plans to use his YMTC NAND in its own iDevices. bottom. If US sanctions activity were to motivate China to ban new Micron, it would be a clear retaliation.
Another possibility is that China’s industrial efforts and investments are already starting to pay off in DRAM and NAND production. Therefore, the country now feels that it has enough alternative supplies to safely avoid US-based Micron products.
We also have to consider how Micron will be affected by this Chinese ban. Micron is one of his three biggest memory makers, but DRAM and NAND are commodity products with little brand prestige. A recent financial report suggests that 25% of Micron’s 2022 revenue came from sales in China. However, in the commodity market, the flow of DRAM and NAND ICs should be able to adjust very quickly.
There were signs that these semiconductor commodities were poised for a further plunge in 2023, but more recently, the positive mood has increased on the back of interest in companies that enable/service the AI tech sector. ing. Despite all the ups and downs in recent months, Micron’s stock is still up nearly 20% over the past six months, accounting for half of that gain over the past five days. Part of the positive attitude behind Micron also stems from recent significant improvements. Investing in Japanis supported by the local government.
As of this writing, Micron shares have not reacted to China’s after-hours trading ban. Since this is new news, we cannot rule out further reactions on Monday.