China bans chipmaker Micron from key infrastructure projects as U.S.-China tech spat escalates | Business News

The spat between Beijing and Washington intensified after it declared that products made by U.S. memory chip giant Micron Technology posed a national security risk.

ChinaChina’s cyberspace regulator said on Sunday that a review found that Micron’s products had unspecified “serious cybersecurity risks” that pose a threat to the country’s information infrastructure.

It told computer equipment users to stop buying products from the US company.

“The review found that Micron’s products have serious cybersecurity risks, posing a major security risk to my country’s critical information infrastructure supply chain and affecting my country’s national security,” the Cyberspace Administration of China said on its website.

The CAC statement did not provide further details about the risks or which Micron products are considered a threat.

Micron said it had received notice from the Cyberspace Administration of China on the conclusion of the review of the company’s products sold in China and looked forward to “continuing discussions with Chinese authorities.”

The U.S., Europe and Japan are reducing China’s access to advanced chipmaking and other technologies they believe could be used in weapons.

Despite their warnings of unspecified consequences, Chinese officials appear to be struggling to find ways to retaliate without hurting the country’s own smartphone makers and other industries.

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

Impact on Micron will be ‘limited’

According to analysts at Jefferies, the latest announcement has limited impact on the company because its main customers in China are consumer electronics companies such as smartphone and computer makers, rather than infrastructure providers.

“Since Micron’s DRAM and NAND products account for much less in servers, we don’t think most of its revenue in China comes from telcos and the government. Therefore, the ultimate impact on Micron will be very limited,” they said.

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

read more: The Embarrassing Multipolar World of the West and the Rich Developing Countries

The formal review of Micron announced last month under China’s increasingly stringent information security laws came hours after Japan joined Washington in restricting China’s access to technology to make processor chips on security grounds.

Last week, Micron announced a plan to invest up to 500 billion yen (£2.9 billion) in extreme ultraviolet technology in Japan, becoming the first chipmaker to bring advanced chipmaking to the country, which is seeking to revive its chip industry.

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China calls G7 a ‘small bloc’

The timing of the CAC’s announcement was significant as U.S. President Joe Biden said on Sunday that the G7 countries had agreed to “reduce risk and diversify our relationship with China.” They also agreed to develop an initiative to counter economic “coercion” during their weekend summit in Hiroshima, Japan.

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

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

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