China Bans Some Chip Sales of Micron, the US Company

The Chinese government on Sunday instructed Chinese companies that handle critical information to stop buying products from Micron Technology, a US-based maker of memory chips used in phones, computers and other electronic devices. Many analysts see the move as retaliation for Washington’s efforts to cut off China’s access to high-end chips.

A statement on the official website Social media On the site, the China Cyberspace Administration said a cybersecurity investigation found that the chipmaker’s products caused “relatively serious cybersecurity problems.” These issues could “seriously jeopardize China’s critical information infrastructure supply chain” and threaten national security, the report said.

China’s actions are the latest barrage of economic retaliation between China and the United States to reshape the sprawling global microchip industry. Micron’s decision to ban chip sales to major companies could have repercussions for China’s supply chain, as Micron’s Chinese customers look to replace U.S.-made memory chips with domestic or South Korean ones. South Korean chip makers such as Samsung and SK Hynix are Micron’s competitors and have already made significant deals with China.

In late March, the Chinese government began a cybersecurity review of Micron as part of what it calls “routine regulatory measures.” The announcement comes after the US government introduced restrictions on China’s semiconductor industry in October. Micron said at the time that it was “fully cooperating” with the investigation and that its China business was operating as normal.

The company did not respond to requests for comment.

Since the announcement, China has embarked on an all-out campaign to strengthen its semiconductor industry. The Chinese government is spending billions of dollars on self-reliant efforts, and Chinese companies, both up and down the supply chain, are replacing Western chips and components.

Chinese officials provided few clues about the findings that pose significant risks. It also provides little information about what is expected of companies during cybersecurity audits. But Graham Webster, editor-in-chief of the DigiChina Project at Stanford University’s Center for Cyber ​​Policy, said among the risks is the possibility of further sanctions by the U.S. government that could cut off key Chinese companies from Micron’s memory chips. said to be sexual.

“Supply chain security includes the risk that foreign governments will cut off supplies, and the U.S. government has taken similar steps with other semiconductors in a variety of ways,” Webster said. rice field. He added that China’s decision may have been partly a “risk-averse measure to avoid further reliance on supplies that the United States may cut off.”

The U.S. government has asked South Korean officials to prevent chip makers from filling the market void if Micron can’t sell chips to China, the Financial Times reported. report in April.

In 2016, China approved a cybersecurity law outlining rules for protecting what it calls “the”.critical information infrastructureThis refers to technical systems in sectors such as telecommunications, transportation and defense that Chinese regulators consider vulnerable in the event of malfunctions or data breaches.

Based in Boise, Idaho, Micron built its first factory in China in 2007. In recent years, as relations between the U.S. and China have cooled, the company has begun to scale back operations, reducing the number of Chinese employees and closing some factories. operation. As of April, the company has about 3,000 employees in Shanghai, Beijing and Shenzhen.

Sunday’s decision could have a significant impact on the company. 2022, Micron report Sales in China amounted to $3.3 billion, or about 11% of annual global sales of $30.8 billion. It is unclear how much sales in China will be affected by the government action.

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