The ongoing semiconductor war between China and the US has escalated further as China announced that Micron Technology Inc. products have failed a cybersecurity review in the country. The Chinese cyberspace administration warned key infrastructure operators against buying Micron products, stating that the company's products sold in the country had "relatively serious" cybersecurity risks. According to the statement, the products posed a significant security risk to the critical information infrastructure supply chain, which would ultimately affect national security. This comes after China announced over a month ago that it was investigating imports from America's largest memory-chip maker, Micron Technology.
The tech sector has become a key battleground for national security between the two largest economies, with Washington already blacklisting Chinese tech firms, cutting off the flow of sophisticated processors, and banning its citizens from providing certain help to the Chinese chip industry. Chinese officials have privately stated that the Micron investigation is part of a broader trend towards the dominance of "pro-retaliation" voices in Beijing, where national security concerns have increasingly trumped economic arguments. Founder of Trenchcoat Advisors and former FBI counterintelligence official in Beijing, Holden Triplett, called the decision by the CAC retaliation for the US's export controls on semiconductors. He added that no foreign business operating in China should be deceived by this subterfuge, as these are political actions pure and simple and any business could be the next one to be made an example of.
The regulator stated that while China welcomes products and services provided by companies of all countries as long as they comply with Chinese laws and regulations, the investigation into Micron products is a "necessary measure" to safeguard national security. However, it did not detail what the security risks were or identify specific Micron products that are now barred. Micron, which has previously said it stood by the security of its products and commitments to customers, is evaluating the conclusion of the review, according to a statement released on Sunday. The company is assessing its next steps and looks forward "to continuing to engage in discussions with Chinese authorities."
Micron is the last remaining maker of computer memory based in the US, having survived brutal industry downturns that forced larger rivals such as Intel Corp. and Texas Instruments Inc. to bow out. The company derived nearly 11% of its revenue from mainland China in its last financial year. While that is relatively low compared to other major tech firms, much of the world's electronics production goes through Chinese factories in some way, and China's move has the potential to harm Micron's customer relationships.
Beijing's announcement has already drawn condemnation from some lawmakers. Raja Krishnamoorthi, an Illinois Democrat and ranking member of the House Select Committee on the Chinese Communist Party, stated that "the CCP's actions are making this an increasingly easier choice for American businesses, and we in Congress need to make it even easier for them to come back home and reinvest in America."