Beijing’s cybersecurity ruling against Micron comes amid an escalating spat with Washington over semiconductor technology
Shares of Micron Technology, the largest U.S. maker of computer memory chips, fell 5 percent on Monday after Chinese cybersecurity regulators banned purchases of the company’s products over concerns they could cause damage. “Significant security risk.”
China’s Cyberspace Administration (CAC) said on Sunday that Micron’s chips could jeopardize Beijing’s critical information infrastructure, such as state-owned banks and telecommunications networks. Idaho-based Micron failed a safety review by the CAC that began in March. The investigation follows Washington’s efforts to stymie the development of China’s semiconductor industry through export controls and sanctions.
“The purpose of this network security review of Micron products is to prevent product network security issues from endangering the security of the country’s key information infrastructure, which is a necessary measure to maintain national security,” CAC said. “China firmly promotes high-level opening up, as long as it abides by Chinese laws and regulations. Enterprises from all countries and platforms are welcome to enter the Chinese market.”
Micron was trading as low as $64.76 on Nasdaq Monday morning, down from Friday’s close of $68.17. The stock had risen 36% this year before Monday’s drop. According to reports, the company relies on the Chinese market for about 10% of its annual revenue.
The CAC did not specify which Micron products would be affected by its decision or how broad the ban would be. The Wall Street Journal said the order does not apply to foreign companies operating in China. “We are assessing the conclusions and assessing our next steps,” Micron responded to the Chinese ruling to the newspaper. “We look forward to continuing discussions with the Chinese authorities.”
China’s foreign ministry last week accused Washington of trying to hinder the technological progress of potential rivals. “The United States has politicized, instrumentalized, and weaponized technological issues and sought to thwart technological progress in other countries,” Ministry of Commerce spokesman Wang Wenbin told reporters on Wednesday.
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China investigates ‘security risks’ at U.S. chipmakers
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