China has launched a cybersecurity investigation into Micron Technology, raising the possibility of a ban on the US memory vendor's product sales in the country.
In response to the probe, Chinese companies, including large-scale cloud server vendors and government-affiliated firms, are already adjusting or replacing the sources of their memory supplies, according to industry sources.
The US reportedly has demanded Korean vendors Samsung Electronics and SK Hynix not expand their shipments to China if Micron product sales are banned.
Sources from the memory industry said the Korean firms are unlikely to comply completely with the US demand. After all, the Korean firms could seize the opportunity to digest their inventory, the sources said.
But the Chinese market would still be undermined if one of the three major DRAM suppliers in the world is prevented from selling its products there. There could be short supply and prices would go up, the sources said.
Many industry observers speculate that China would spare Micron's DRAM, but would ban its NAND flash and SSD products.
The US has banned exports of equipment for making 128-layer or more NAND flash chips to China, directly disrupting YMTC's tech upgrades. But the Chinese NAND chip maker already has considerable production capacity.
Industry sources said YMTC's production remains normal although it may not be able to completely replace Micron in the local NAND market. YMTC's fab in Wuhan has a production capacity of 100,000 to 120,000 wafers monthly, and its first-quarter 2023 output did not show any decline compared to the previous quarter, the sources said. It recently has also received an extra investment of CNY12.9 billion (US$1.87 billion) from China's Big Fund.
The global NAND market is more competitive than the DRAM one. If Micron is banned from China, other NAND vendors, including Samsung, SK Hynix, Kioxia, and Western Digital will definitely take over Micron's market share in China, the sources added.
Micron's share in China's cloud server and SSD market has already dropped sharply, now accounting for about 10%, the sources said.