The Chinese government escalated the semiconductor war with the US by imposing new restrictions on Micron Technology over the weekend. The move further deepens the tech sector as a pivotal battleground in the national security sphere.
China has escalated the ongoing semiconductor war with the United States by announcing new restrictions on Micron Technology Inc. The move comes after a cybersecurity review conducted by the Cyberspace Administration of China (CAC) found “relatively serious” cybersecurity risks in Micron products sold in the country. Beijing has warned key infrastructure operators against purchasing Micron’s goods, citing significant security risks to the national information infrastructure supply chain and overall national security.
This latest development intensifies the tech sector’s role as a battleground for national security between the world’s two largest economies. The United States has already taken measures such as blacklisting Chinese tech firms, cutting off the supply of advanced processors, and imposing restrictions on its citizens providing assistance to the Chinese chip industry.
While Micron is less reliant on China compared to its peers, this move raises concerns for other US chipmakers that rely heavily on the Chinese market. Companies such as Qualcomm Inc., Broadcom Inc., and Intel Corp. supply billions of chips to China, which are used in electronic products shipped globally.
The US Commerce Department has responded to China’s actions, stating that it will engage directly with Chinese authorities to clarify its position and address the distortions caused by China’s actions. Additionally, the department plans to collaborate with key allies and partners to ensure close coordination in dealing with the memory chip market disruptions caused by China.
The Chinese cyber agency’s statement did not provide specific details about the security risks or identify the Micron products that are now prohibited. Micron claims they have maintained their commitment to security and their customers. The company stated that they are evaluating the conclusion of the review and then US-based tech behemoth looks forward to continuing discussions with Chinese authorities.
Memory chips have been a significant point of tension in US-China relations. In December, Washington blacklisted Yangtze Memory Technologies Co., a state-backed flash memory maker, limiting China’s capabilities in advanced 3D NAND-style chips. Micron, the last remaining US-based computer memory manufacturer, has survived industry downturns that caused larger competitors like Intel and Texas Instruments to exit the market.
The move by Chinese authorities comes just a few months after Beijing officially ended their controversial “Zero-COVID” policy and began reopening their doors to the outside world.
Most of Micron’s products adhere to industry standards, allowing for easy interchangeability with chips from rival manufacturers such as Samsung Electronics and SK Hynix. Although memory chips are generally not considered a cybersecurity risk, as they do not require specific software or run code, China’s warning could potentially impact Micron’s customer relationships and divert business to its larger competitors.
In related news, Chinese chip stocks experienced a significant rally as Asian markets opened on Monday, May 22, 2023. Meanwhile, the US Commerce Department has emphasized the importance of engaging directly with Chinese authorities and collaborating with allies and partners to address the distortions caused by China’s actions in the memory chip market.
