China has initiated a cybersecurity investigation into Micron Technology, a major American memory chip manufacturer, likely in response to new restrictions imposed by US allies in Asia and Europe on crucial technology sales to Beijing.
The Cyberspace Administration of China (CAC) will be examining the products distributed by Micron within the country, as announced by the regulatory body last Friday. This action is meant to uphold the security of critical information infrastructure supply chains, prevent cybersecurity threats from potential product flaws, and safeguard national security.
Coincidentally, Japan, a key US ally, declared on the same day that it would limit the export of sophisticated chip manufacturing equipment to multiple countries, including China, mirroring similar actions by the US and the Netherlands.
The United States and its partners have imposed constraints on China’s semiconductor sector, which challenges Beijing’s aspirations of attaining technological supremacy. Notably, the Netherlands recently imposed new limitations on the overseas sale of semiconductor technology, justifying it as a measure to ensure national security. Furthermore, in October, the US prohibited Chinese firms from purchasing cutting-edge chips and chipmaking equipment without a proper license.
Micron, in response to inquiries from CNN, confirmed its awareness of the review imposed by CAC. The company expressed willingness to collaborate and asserted the security and reliability of its products, emphasizing that its operations remain unaffected. Micron’s shares fell by 4.4% on Wall Street last Friday, marking the steepest decline in over three months, and showed a further 1.2% drop on Monday. The company relies significantly on China, generating more than 10% of its revenue from the country.
Moreover, in a prior disclosure, Micron, based in Idaho, had forewarned of such potential risks. The company highlighted the possibility of the Chinese government imposing restrictions on its access to the Chinese market or hindering its competitiveness against local Chinese enterprises.
The Chinese government has vocally opposed limitations on tech exports, labeling them as measures it unequivocally denounces. In a bid to stimulate economic growth and foster job opportunities, Beijing aims to attract foreign investments amidst escalating economic pressures. Premier Li Qiang and other senior economic figures have been actively welcoming global business leaders, assuring them of a conducive environment and support services.
Nonetheless, Beijing has increasingly applied pressure on foreign corporations to align with its policies. Last month, authorities shut down the Beijing office of Mintz Group, a US corporate intelligence firm, and detained five of its employees. Shortly after, they suspended Deloitte’s operations in Beijing for three months and imposed a hefty fine of $31 million over alleged audit deficiencies in their work with a state-owned distressed debt manager.
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