The Chinese government has imposed a ban on Micron Technology products over concerns around national security. The move is part of an ongoing semiconductor trade war between the US and China, with both countries imposing similar restrictions on their companies. The ban by China’s Cyberspace Administration applies to computers handling sensitive information and extends disruptions of global supply chains and US business losses while making it harder for China to develop its own chip industry.
US chip giant Micron is reportedly under investigation in China and is facing a potential ban on the sale of its products in the country. The ban would leave Chinese companies ChangXin Memory Technologies (CXMT) and Yangtze Memory Technologies Corp (YMTC) as the leading makers of dynamic random-access memory (DRAM) chips. The Chinese government has also reportedly raided offices of US chip manufacturers and suppliers. US State Department spokesperson Matthew Miller has confirmed that his department is engaging directly with Beijing over the Micron ban.
Recently, the US and Europe have imposed sanctions on Chinese tech firms, including Huawei and TikTok, citing national security risks. Washington, Japan and the Netherlands have also imposed similar restrictions on Chinese players. Such bans extend disruptions of global supply chains, making it harder for Chinese companies to access much-needed technologies.
Regulators identified “serious potential network security issues” with the company and dubbed its products a danger to China’s national security. The move by China is likely to worsen US-China relations as the Biden administration has acted to limit China’s ability to both purchase and manufacture high-end computer chips while promoting competition against China. The development comes as the US seeks to promote domestic semiconductor manufacturing and reduce China’s involvement in the manufacturing of US infrastructure.
The ban could not come at a worse time for Micron as its share in China’s cloud server and SSD market has already dropped to about 10%. If Micron is banned from China, other NAND vendors, including Samsung, SK Hynix, Kioxia and Western Digital are likely to take over Micron’s market share in China. However, many industry observers say that China is unlikely to ban Micron’s DRAM but would instead prohibit sales of its NAND flash and SSD products.
It remains to be seen how the dispute between China and the US will play out, but it is clear that national security concerns continue to be a major factor in the technology industry. As both countries continue to impose restrictions on each other, the result is likely to be a further deterioration of US-China relations and disruptions in global supply chains.
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