China has initiated a cybersecurity investigation into Micron Technology, a prominent American memory chip manufacturer. This action appears to be a response to recent restrictions imposed by US allies in Asia and Europe on crucial technology sales to Beijing.
The Cyberspace Administration of China (CAC) will evaluate Micron’s products sold within the country, as announced by the watchdog on Friday. This move aims to uphold the security of essential information infrastructure supply chains, mitigate cybersecurity risks stemming from hidden product issues, and safeguard national security.
The investigation coincided with Japan’s decision, a key US ally, to limit the export of advanced chip manufacturing equipment to various countries, including China. This follows similar steps taken by the United States and the Netherlands.
The US and its allies have imposed constraints on China’s semiconductor industry, impacting Beijing’s aspirations to emerge as a technology powerhouse. The Netherlands recently introduced restrictions on overseas semiconductor technology sales to protect national security, while the US prohibited Chinese firms from acquiring advanced chips and chipmaking equipment without authorization in October.
Micron, in response to the review, stated its awareness and full cooperation with the CAC. The company reiterated the security of its products and assured that its operations, including product shipments, engineering, manufacturing, sales, and other functions, continue as usual. However, Micron’s shares plummeted 4.4% on Wall Street on Friday, the sharpest decline in over three months, and further decreased by 1.2% on Monday. Notably, Micron garners more than 10% of its revenue from China.
In a previous filing, Micron had highlighted potential risks, expressing concerns about restrictions that may hinder its activities in the Chinese market or impede its competitiveness against local companies. China has vehemently criticized tech export limitations, emphasizing its firm opposition to such measures.
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Amid China’s efforts to attract foreign investments and navigate economic challenges, the country is keen on fostering growth and job opportunities. While welcoming global CEOs with promises of a favorable business environment, Beijing has also tightened scrutiny on foreign enterprises to align with its objectives.
Recently, the authorities in Beijing closed the office of Mintz Group, a US corporate intelligence firm, and detained local staff. Additionally, Deloitte faced a three-month suspension of its operations in Beijing along with a hefty fine over alleged audit discrepancies at a state-owned distressed debt manager.