China bans chip maker Micron from major infrastructure projects

A network security review of Micron products sold in China has found the products pose a significant security risk to the country’s key information infrastructure supply chain, according to China’s Cyberspace Affairs Commission.

Micron is a US memory chip giant that manufactures computer memory and computer data storage, including dynamic random access memory, flash memory, and USB flash drives. Chinese authorities did not specify which Micron products are banned, what security risks they pose, or what will happen to existing Micron products that are already in use.

“The review found that Micron’s products have more serious cybersecurity issues and pose significant security risks to the supply chain of China’s critical information infrastructure, affecting China’s national security,” China’s Cyberspace Affairs Commission said in a machine translation.

For this reason, the Office of the Network Security Review concluded that the Network Security Review should not proceed, the statement said.

“Pursuant to the Network Security Law and other laws and regulations, operators of critical information infrastructure in China must stop purchasing Micron products,” the Commission said in a statement.

The purpose of this review of the network security of Micron products was to prevent product network security issues from jeopardizing the security of the nation’s critical information infrastructure, which is a necessary measure to maintain national security, the commission said in a March 31 statement.

China’s move can be seen as the first step in retaliation after several other countries banned the import of Chinese equipment due to security concerns. Countries such as the UK and Sweden have imposed bans on hardware products from China. Germany is still scrutinizing the use of Chinese equipment on its main transport networks.

US and Micron respond

After China’s announcement, the US Department of Commerce issued a statement stating that it opposes the restriction because it has no basis.

“We have seen the statement from the People’s Republic of China (PRC) regarding Micron. We are categorically opposed to restrictions that have no basis in fact,” said the spokesperson of the Ministry of Commerce. statementjournalists shared on Twitter.

This action, along with recent raids and targeting of other US companies, contradicts the PRC’s claims that it is opening up its markets and committed to a transparent regulatory framework, the statement said.

“We will deal directly with the PRC authorities to detail our position and clarify their actions. We will also work with key allies and partners to ensure that we are closely coordinated to address the distortions in the memory chip market caused by China’s actions,” the statement said.

The chipmaker acknowledged it had received the regulator’s review and “looks forward to continuing discussions with Chinese authorities,” according to Reuters.

Micron did not immediately respond to a request for comment.

China’s latest announcement escalates an ongoing semiconductor trade dispute that has disrupted the chip supply chain.

The ongoing semiconductor trade dispute

A series of measures have been taken by the presidential administrations of Joe Biden and Donald Trump, which have banned the use of Chinese-made hardware on US networks and imposed export controls to keep the latest computing technology out of China’s hands.

In October, the Biden administration issued export controls that bar American companies from selling advanced semiconductors and equipment to certain Chinese manufacturers unless they obtain a special license.

In December, the restrictions were expanded to include 36 additional chip makers that can access US chip technology, including Yangtze Memory Technologies Corporation (YMTC), the world’s largest contract chip maker. The Biden administration has stated that the purpose of the restrictions is to deny China access to advanced technologies for military modernization and human rights abuses.

In March, the Dutch government announced it was moving forward with plans to impose new export restrictions on advanced chip-making technology to China.

Nations are ramping up chip manufacturing capacity

With restrictions in place and similar restrictions in place, several countries are now ramping up chip manufacturing capacity domestically.

Earlier this month, the UK government unveiled its 10-year strategy to support the country’s semiconductor industry, which includes a £1 billion ($1.24 billion) investment to boost research and development efforts and strengthen the industry’s talent pipeline.

The US and India have also signed a memorandum of understanding to build a semiconductor supply chain, which could provide an opportunity for both countries to reduce global dependence on China.

In July, the US Senate approved the CHIPS Act, a bill that would provide $52 billion in aid to semiconductor manufacturers looking to manufacture products in the US, as well as a 25% tax credit for investment in the industry as well as research. and workforce development grants. China itself is spending $143 billion to boost its domestic chip production in the face of trade restrictions.

Copyright © 2023 IDG Communications, Inc.

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