In a move that is likely to further escalate the US-China technology feud, the Chinese government imposed sales restrictions on US memory chipmaker Micron Technology Inc., citing a national security risk.
The Cyberspace Administration of China stated that a network security review found Micron’s products to have serious potential network security issues that pose risks to the country’s critical information infrastructure supply chain.
China's Micron ban revives US trade tensions, fuels Asian chip rally https://t.co/u5yhPP7I2w pic.twitter.com/eGbcqj2Tgg
— Reuters Tech News (@ReutersTech) May 22, 2023
Micron Fails Security Review
Micron, the most prominent memory chipmaker in the US, has failed to pass the Chinese cybersecurity review. The cyberspace agency did not specify the details of the risks that it had found or the products that would be affected.
“According to the ‘Network Security Law’ and other laws and regulations, operators of critical information infrastructure in China should stop purchasing Micron products,” the agency’s website reported.
The Chinese government has said that the review aimed to prevent the product network security issues from endangering the country’s information infrastructure security, which is vital to maintaining national security.
“China firmly promotes high-level opening up to the outside world. As long as it abides by Chinese laws and regulations, companies from all countries and various platforms are welcome to enter the Chinese market,” the cyberspace agency remarked in a reassurance to foreign companies.
Chinese chipmakers' shares rise after China fails Micron in security review https://t.co/a9SBzbakjG pic.twitter.com/kUqmrJB3GH
— CNA (@ChannelNewsAsia) May 22, 2023
Retaliatory Move
Amid concerns about China’s increasing assertiveness toward Japan and other neighbours, and worries about a potential invasion of Taiwan, the US, EU, and Japan are reducing Chinese access to advanced chipmaking and other technologies, which they fear might be used in weaponry.
China announced in April that it was reviewing Micron’s products. The move was an explicit retaliation against Washington’s sanctions on the Chinese chip sector.
The US Commerce Department derided the Chinese claims, saying it “firmly opposes restrictions that have no basis in fact.” It added that the US will engage with the Chinese authorities and its key allies to address distortions in the memory chip market owing to China’s actions.
China has accelerated its investments in chip development in recent years to become self-reliant as US chip controls have threatened China’s technological development.
The latest move comes just after the G7 leaders meeting in Japan issued a joint statement criticising China, including its use of “economic coercion.”