China will conduct a cybersecurity review for the United States' largest memory chip manufacturer Micron Technology. The company becomes the first foreign chip maker to be put under review by Chinese regulators, which could emanate from the existing trade tensions between the two.
(Photo : MANDEL NGAN/AFP via Getty Images)
US President Joe Biden (2L), with US Senate Majority Leader Chuck Schumer, and New York Governor Kathy Hochul, looks at a 3D rendering of a future Micron factory presenting by CEO of Micron Technology Sanjay Mehrotra (L) during a tour of the Micron Pavilion at the SRC Arena and Events Center of Onondaga Community College in Syracuse, New York on October 27, 2022.
Cybersecurity Review
Micron Technology has been subjected to a cybersecurity review by China for its products sold in the country. Interesting Engineering reported that this probe aims to protect the country's national security, ensure the integrity of China's information infrastructure supply chain, and prevent network security risks.
The Cyberspace Administration of China will conduct a review of Micron's products sold in China, and said through a statement that this is to "safeguard key information infrastructure supply chain security and prevent cyberspace security risks due to problematic products."
As per a statement from the company, they stand by their products and continues to communicate and cooperate with Chinese regulators. Almost 11% of its sales come from China and since this announcement, the company's stock dropped 5.1% to $59.90 in New York.
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"The Chinese government may restrict us from participating in the China market or may prevent us from competing effectively with Chinese companies," the company stated during its annual report last year. This comes at a time when Beijing is fighting a battle with the Biden Administration for control over China's technology supply chains.
This was followed by several restrictions for the export of chips that the US authorities implemented to hinder technology advancement. Reuters reported that the United States imposed restrictions for fear it could be used to produce chips for applications, including artificial intelligence that could be used by China's military.
US-China
Aside from its valid reasons to protect China's national security, there might be some other possible reasons for this review. Bloomberg reported that the United States has been blacklisting a lot of Chinese technology companies and continuously banning its citizens from providing certain help to their chip industry.
This includes Chinese chipmaker Fujian Jinhua Integrated Circuit Co., which has been blacklisted by Washington more than four years ago due to suspicion of economic espionage and conspiring to steal trade secrets.
Aside from this, Washington enlisted allies with several countries. Japan stated that it will expand its restrictions on exporting to the leading chip-making technology of China, joining the Netherlands.
Economic Program at the Center for Strategic and International Studies Senior Fellow Gerard DiPippo stated it is possible that this investigation intends to pressure the United States and its allies to loosen export controls.
"It's even more likely that Beijing is legitimately worried about China's reliance on Micron chips, or really any US technology. Expect more actions like this going forward," he added.
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