Micron, the largest producer of memory chips in the U.S., derived a quarter of its revenues for 2022 from China and Hong Kong, according to FT. Analysts view Beijing’s restrictions as a response to increased U.S. export controls on China. It is possible that similar sanctions will soon follow against Apple. 

Chinese authorities have identified national security issues with products from U.S. chipmaker Micron and have banned critical infrastructure operators from procuring them.

“In accordance with the network security law, as well as other laws and regulations, critical information infrastructure operators in China must cease purchasing Micron products,” stated the State Internet Information Office of the PRC.

Micron Technology is a U.S. manufacturer of semiconductor products, primarily specializing in DRAM and NAND memory chips, flash memory, SSD drives, and CMOS sensors.

An investigation into the products of the U.S. company commenced in China in early April. Beijing initiated the probe to safeguard national security, protect its information infrastructure, and mitigate risks arising from potential product issues, the agency stated.

Micron has been informed by Chinese authorities. “We are assessing this decision and determining our next steps. We look forward to further discussions with Chinese authorities,” the company’s statement was quoted by FT.

The publication highlights that Beijing’s action follows Washington’s attempts to restrict China’s access to critical Western technologies. In October 2022, the U.S. implemented expanded controls on chip exports, a move subsequently emulated by the Netherlands and Japan.

Analysts believe that Micron has become an obvious target for China since it would be easier for Beijing to replace its products with chips from South Korean competitors such as Samsung and SK Hynix. The newspaper reports that Washington has urged Seoul to discourage its chipmakers from filling the gap in the Chinese market if Beijing prohibits imports of Micron products.

China is a significant market for Micron. Mainland China and Hong Kong accounted for 25 percent of Micron’s total revenue of $30.8 billion in 2022, according to an informed source.

“This [Beijing’s restrictions] could potentially be detrimental to Micron. The impact will depend on how broadly China defines critical information infrastructure, but this could encompass the financial sector, transportation, energy, and data centers,” commented Paul Triolo, a Chinese technology expert at consulting firm Albright Stonebridge, to FT

Earlier, we reported that U.S. stock indexes are rising slightly after a decline.