China Warns Companies to Stop Buying Chips from American Company Micron

The Chinese government on Sunday warned tech companies in the country to stop buying chips and processors from American chipmaker Micron. Beijing said Micron Technology, the largest memory chipmaker in the United States, has failed its network security review and poses a critical risk to China’s national security.

“The review found that Micron’s products have serious network security risks, which pose significant security risks to China’s critical information infrastructure supply chain, affecting China’s national security,” the Cyberspace Administration of China (CAC) said. “Operators of critical information infrastructure in China should stop purchasing products from Micron Co.”

Apart from a six-sentence statement on its website, the CAC gave no further details about the trade advisory. But trade and tech experts said a definition of China’s “critical information infrastructure” could include transport and finance. Micron said it is aware of Beijing’s decision and that it is working with Chinese authorities to resolve the differences.

Micron said its business in China has not been impacted lately even though the CAC announced a review of its products in March. Micron generates about 10% of its global sales in China, and it remains unclear if the advisory on its tech products will be imposed on non-Chinese companies operating within the country.

Experts said Beijing is only retaliating against Washington for imposing restrictions on several Chinese chipmakers. The US government prohibited US companies from buying Chinese chip technology and also prevented Chinese tech companies from accessing American technologies. This was part of the sanctions imposed against the President Xi Jinping administration for threatening to attack Hong Kong, Japan, and Taiwan, and for its treatment of ethnic minority Uighur Muslims.

Before bearing down on Micron, it appears China had been devising ways to get back at the US but couldn’t find a way because of the potential backlash on Chinese smartphone manufacturers. Chinese chipmakers for smartphones, tablet computers, and consumer electronics sell more than $300 million worth of chips annually to foreign countries.

Chinese police carried out raids on foreign companies in the country as well as two American consulting firms – Bain & Co and Capvision – as well as Mintz Group, a due diligence firm. The cold war between China and the US continues to rage across several frontiers.