China’s Micron ban revives US trade tensions, boosts Asian chip rally. On Monday, some Chinese and South Korean chipmaker stocks rose after Beijing prohibited U.S. firm Micron Technology (MU.O) from selling memory chips to critical domestic industries over security concerns, sparking Sino-U.S. trade tensions.
China’s cyberspace authority announced late Sunday that Micron failed its network security examination and will bar key infrastructure operators from buying from the business.
It did not disclose its findings or which products from the largest U.S. memory chipmaker were affected.
Washington opposed the move, but Micron’s Chinese and other rivals benefited as mainland corporations sought memory goods from other sources.
“We firmly oppose restrictions that have no basis in fact,” a U.S. Commerce Department official said Sunday.
“This action, along with recent raids and targeting of other American firms, is inconsistent with (China’s) assertions that it is opening its markets and committed to transparent regulatory framework.”
After Chinese police raided Mintz Group and Bain, tensions between Washington and Beijing increased.
After a succession of export prohibitions by Washington on specific American components and chip-building techniques to prevent them from advancing China’s military capabilities, Beijing targeted Micron, the first U.S. chipmaker.
China began the study in late March amid a chip technology dispute and weakening US-China relations.
The move follows the Group of Seven’s “de-risk, not decouple” economic engagement with China and President Joe Biden’s request for an “open hotline” between Washington and Beijing.
The Commerce Department “will engage directly with Chinese authorities to detail our position and clarify their action.” In addition, we will collaborate with key friends and partners to address China’s memory chip market distortions.”
On Monday, state media reported that China’s Micron assessment might assist domestic chipmakers, boosting shares of several local chipmakers.
Gigadevice Semiconductors (603986. SS), Ingenic Semiconductor (300223. SZ), and Shenzhen Kaifa Technology (000021. SZ) shares rose 3%–8%.
Samsung Electronics (005930. KS) and SK Hynix (000660. KS), Micron’s main competitors, saw sales grow 0.7% and 2%, respectively, compared to 0.9% for the market (.KS11).
“As China’s domestic memory suppliers are not competitive in technologies AND capacity, China would need to resort to Samsung, SK Hynix, Kioxia, Western Digital (WDC.O) or other foreign suppliers as the alternative to Micron,” Bernstein analysts wrote.
Samsung and SK Hynix, which have chip plants in China, may win additional Chinese consumers.
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