China bans Micron's products in critical IT infrastructure

Jingyue Hsiao, DIGITIMES Asia, Taipei 0

Credit: AFP

After a review of nearly two months, China decided to require critical IT operators to cease buying Micron's products, with its ramifications potentially expanding outside of its China market.

According to a statement by the Cyberspace Administration of China, after a cybersecurity review of Micron's products, China found significant cybersecurity risks associated with Micron's products, posing a major threat to the supply chain of China's critical IT infrastructure and national security. The authority decided to require critical IT infrastructure operators to stop procuring Micron's products, adding that China remains committed to opening up to the world and welcomes those who comply with Chinese laws and regulations to operate in China.

Reuters reported that Micron said it had received the notice of the review's conclusion and is looking forward to continuing to engage in discussions with Chinese authorities.

The review was announced in late March before Betty Wu was appointed the new general manager for Micron China in mid-May and is responsible for "embodying the company's unwavering commitment to China's technology ecosystem, business operations, and various stakeholders in China," according to Micron's statement.

Bloomberg quoted Holden Triplett, founder of Trenchcoat Advisors, saying that the decision was nothing but a retaliation for the US's export controls on semiconductors, adding that these are driven purely and simply by politics and any business could be the next one to be made an example of.

Despite China's ban on Micron's products only applying to a few big Chinese companies, Wall Street Journal quoted Lester Ross, a Beijing-based lawyer at WilmerHale, saying that Micron's other customers in China may turn to other sources for memory products. Bloomberg Intelligence analyst Paula Penkal said in an earlier research note that China's review could affect Micron's direct exposure to China and customers who use its chips, including Intel, Qualcomm, Apple, and Dell. Meanwhile, South-Korean memory providers may benefit from the Micron ban.

Micron said in its 10-K document that China might restrict it from participating in the Chinese market or may prevent it from competing effectively with its Chinese counterparts.