The Chinese government has ordered infrastructure operators to stop buying Micron Technology chips. The action follows a US prohibition on using the social video app TikTok on government phones and US limitations on exporting some advanced computer components to China.
While using its platform, the Cyberspace Administration of China warned that its products pose “serious network security risks” to China’s information infrastructure and national security.
On Sunday, the Chinese ministry advised key information infrastructure operators to stop buying Micron goods. A US Department of Commerce official called the move “no basis in fact.” Micron generates 15% of revenues from China and Hong Kong, and its shares fell 3.7% in early New York trading.
On Japan’s seventh and last G7 meeting day, Joe Biden said he expected relations with China to improve “very shortly.” Micron said. On Sunday, the US president called the February shooting down of a Chinese surveillance balloon off the east coast a “silly balloon” that destabilized the relationship.
On 4 April, hours after Japan joined Washington in restricting Chinese access to processor chip technology, China announced an official review of Micron under its information security regulations.
According to the cyberspace agency, China is fully committed to “high-level” opening up, and firms and (products and services) worldwide are welcome to access the Chinese market so long as they adhere to Chinese law and regulations.
China’s broad definition of key information infrastructure might damage Micron products in telecoms, transit, and banking. Micron executives estimated the financial cost at a single-digit percentage of revenues.
Micron’s CFO Mark Murphy has stated that the business expects an impact of between a low single-digit and a high single-digit percentage of the company’s overall revenue.
Micron, a major American chipmaker, has had its goods blacklisted in China due to cybersecurity concerns. The decision was made public by the Chinese Cyberspace Administration on May 21, 2023, after an investigation into the security of Micron goods supplied in China had begun in March of that year. The Chinese government released a statement claiming that the investigation had found “serious cybersecurity problems” with Micron products, “which posed major risks to China’s critical information infrastructure supply chain and affected China’s national security.” This means that “operators of critical information infrastructure in China should stop purchasing Micron products.”
The Cyberspace Administration of China mentioned the country’s cyber and information security regulations as the cause but did not elaborate on the specific cybersecurity concerns. As soon as the announcement was made by the People’s Republic of China (PRC) about Micron, the United States Department of Commerce issued a strong statement of opposition. We are totally against laws that have no factual foundation. The PRC also claims that it is giving access to its markets and dedicated to a transparent regulatory structure are at odds with this action and other recent raids and targeting of other American firms. U.S. government officials said they will work with other organizations “to ensure we are closely coordinated to address distortions of the memory chip market caused by China’s actions.”
Micron has told the Wall Street Journal that it is “considering its stand” and is “eager to continue talking with the Chinese government.” The statement comes as US-Chinese geopolitical tensions continue to escalate, with knock-on effects in industries like semiconductor chip production and cyber security. For instance, the United States has recently imposed severe limits on the sale of semiconductors to Huawei, a Chinese tech behemoth, and the same business has also faced severe limitations on access to Western markets, including the United States and the United Kingdom. In addition, the European Union, the United States, Canada, and other countries have lately imposed bans on the Chinese social media platform TikTok. These choices reflect unease about the close ties and information sharing between the Chinese government and regional private businesses.