Beijing on Sunday told Chinese companies that deal with critical information to stop purchasing products from Micron Technology, the US-based manufacturer of memory chips used in phones, computers and other electronics.
Many analysts viewed the move as retaliation for Washington’s efforts to cut off China’s access to high-end chips.
In a statement on its official social media site, the Cyberspace Administration of China said that in a cybersecurity review it had found that the chipmaker’s products posed “relatively serious cybersecurity problems”.
The problems could “seriously endanger the supply chain of China’s critical information infrastructure” and threaten national security, it said.
China’s action is the latest volley in an economic tit-for-tat between Beijing and Washington that is rearranging the fabric of a sprawling global microchip industry.
The decision to bar Micron from selling its chips to key companies could have a ripple effect through China’s supply chains, as Micron’s Chinese customers seek to replace the US memory chips with homegrown or Korean versions.
South Korean chipmakers such as Samsung and SK Hynix are Micron’s competitors and do significant business with China.
Beijing initiated a cybersecurity review of Micron in late March as part of what it called a “normal regulatory measure”.
The announcement came after Washington rolled out restrictions in October against China’s semiconductor industry. Micron said at the time that it was “cooperating fully” with the investigation and that its China business was operating as normal.
In a statement, the company said it was “evaluating the conclusion and assessing our next steps,” adding that it was “continuing to engage in discussions with Chinese authorities”.
Chinese authorities offered few clues about what they had discovered that posed serious risks. They have also provided little information about what is required of companies during a cybersecurity review.
But Graham Webster, editor-in-chief of the DigiChina Project at the Stanford University Cyber Policy Center, said that among the risks was the potential for further sanctions by Washington that could cut off important Chinese companies from Micron’s memory chips.
Micron, which is based in Boise, Idaho, built its first factory in China in 2007. In recent years as relations between the United States and China cooled, it has begun to downsize its operations, reducing the number of Chinese staff and shutting down some operations.
As of April, it had about 3,000 employees in Shanghai, Beijing and Shenzhen. – New York Times
