‘Semiconductor war’ in full swing…China sanctions US Micron for first time

China has imposed a massive purchase ban on Micron, the largest U.S. memory chipmaker, citing “serious network security risks.”

This is the first time the Chinese government has conducted a cybersecurity review and imposed large-scale sanctions against a U.S. semiconductor company.

According to Reuters and the Financial Times, the Internet Security Review and Adjudication Center (CAC), part of China’s State Internet Information Commission, found that Micron’s products posed “serious security risks to China’s critical information infrastructure supply chain,” and ordered that “operators of important national security facilities should stop purchasing the products,” according to Reuters.

The findings were released shortly after the Group of Seven (G7) summit on China and Russia, prompting analysts to speculate that the U.S.-China semiconductor confrontation is in full swing. Micron CEO Sanjay Metcalfe attended the G7 summit as part of a corporate delegation.

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Chinese authorities reviewed Micron’s products for seven weeks prior to the move, which they said was aimed at “preventing them from jeopardizing the safety of the country’s critical basic information infrastructure.”

The decision comes after the U.S. introduced broader semiconductor export restrictions in October last year, including blacklisting China’s Yangtze Memory Technology and others, and the Netherlands and Japan have since followed suit.

The Financial Times cited experts as saying that Micron’s technology was targeted first because it can be more easily replaced by memory semiconductors from rival South Korean companies Samsung Electronics and SK Hynix.

Last month, the White House asked South Korea to urge memory chipmakers not to fill a market void in China if sales of Micron products were restricted.

China is Micron’s third-largest export market after the U.S. and Taiwan. Last year, the company’s sales to mainland China and Hong Kong accounted for 25 percent of its $30.8 billion in revenue.

In response to the Chinese authorities’ action, Micron said in a statement, “We have received notice of the completion of the China Consumer Protection Bureau’s review of Micron products sold in China, and we look forward to continuing our discussions with the Chinese authorities.”

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