Hong Kong (CNN) China has banned US chip maker Micron from selling to Chinese companies working on major infrastructure projects, in a significant escalation of the ongoing battle between the world’s two largest economies over access to crucial technology.
The Cyberspace Administration of China (CAC) announced the decision on Sunday, saying the US chipmaker had failed to pass a cybersecurity review. The news came shortly after the conclusion of the G7 summit in Hiroshima, Japan, where the leaders of major democracies spoke with one voice about their growing concerns about China.
“The review found that Micron’s products have relatively serious cyber security risks, which pose significant security risks to China’s critical information infrastructure supply chain and will affect national security,” the Chinese regulator said in a statement.
As a result, she said, operators involved in domestic critical information infrastructure projects should stop purchasing products from Micron.
shares micron technology (mo) It sank about 3% Monday. The Asian competitors ended the day on a high. Shares of Chinese memory chip maker Ingenic Semiconductor jumped 2.8%. Shenzhen Techwinsemi Technology rose 6.3%. Toyou Feiji Electronics rose 14%. In Seoul, SK Hynix, one of the world’s largest memory chip makers, rose 0.9%, outperforming the South Korean market.
The Chinese regulator’s decision came seven weeks after it launched a cybersecurity review of Micron’s products, in apparent retaliation for sanctions imposed by Washington and its allies on China’s chip sector.
Micron is one of the largest memory chip manufacturers in the United States. It derives more than 10% of its revenue from mainland China.
The company told CNN that it has received the regulator’s notice and is evaluating its next steps.
“We look forward to continuing discussions with the Chinese authorities,” she said in a statement.
The US Commerce Department said it strongly opposes the restrictions, which “have no basis in fact,” according to Reuters.
This action, along with recent strikes and targeting of other US companies, is inconsistent with [China’s] Assurances that they open their markets and adhere to a transparent regulatory framework.”
The US State Department similarly said it had “very serious concerns” about the ban.
“The Department of Commerce is engaging directly with the People’s Republic of China to make our point, and broadly speaking, this action appears inconsistent with the People’s Republic of China’s assurances that it is open for business and committed to a transparent regulatory framework,” said US State Department spokesperson Matthew Miller. Monday.
China’s foreign ministry on Sunday accused G7 leaders of “obstructing international peace” and said the group needed to “reflect on its behavior and change course”.
“economic coercion” of China
In a landmark joint statement on Saturday, the members of the Group of Seven (G7) industrialized nations offered the most detailed expression of a common position on China to date – emphasizing the need to cooperate with the world’s second-largest economy, but also to counter “malign practices” and “. coercion.” In a historic joint statement Saturday.
Since October 2022, Washington has imposed sweeping restrictions on the export of chips and advanced chip manufacturing equipment to China, in an effort to cut off China’s access to critical technology for military purposes.
In March, Japan and the Netherlands, two major US allies, announced restrictions on overseas sales of chip-making technology to countries including China. China has sharply criticized these restrictions, calling them “discriminatory containment” directed against the country.
Chips are central to Beijing’s bid to become a tech superpower. China has its own chip manufacturers, but they mostly supply low to mid-end processors used in home appliances and electric vehicles.
The semiconductor battle is part of the growing divide between the United States and China. In recent years, relations between the two countries have reached their lowest point in decades.
Tensions rose this year after US fighter jets shot down a Chinese spy balloon in February, and Beijing has continued to deepen ties with Russia despite its continued invasion of Ukraine.
However, US President Joe Biden said on Sunday that he expects relations between the two countries to improve soon.
“I think you’ll see that start to melt pretty soon,” Biden said At a press conference at the conclusion of the G7 summit in Japan.
He said he had agreed with Chinese President Xi Jinping in November to keep communications open, but that everything changed after “a silly balloon carrying two cargo cars worth spy equipment” was dropped.
“We are not looking to separate from China,” he said. “We look forward to de-risking and diversifying our relationship with China.”
— CNN’s Simon McCarthy, Jennifer Hansler and Saba Haroun contributed to this report
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