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US Chipmaker Micron Fails In China’s Security Review

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China’s cyberspace authority declared on Sunday that Micron Technology Inc, a manufacturer of memory chips based in US, had failed its network security review and that users of critical infrastructure would no longer be allowed to purchase its goods.

In China’s purview regarding essential information infrastructure, the decision, which was made as the disagreement over semiconductor technology between Washington and Beijing has been going on, may cover industries as diverse as telecom, transportation, and finance.

Micron stated that it has received the CAC’s notification of the conclusion of its investigation into the company’s goods marketed in China and looks “forward to continuing to engage in discussions with Chinese authorities.”

In an official statement, the Cyberspace Administration of China (CAC) said, “The review found that Micron’s products have serious network security risks, which pose significant security risks to China’s critical information infrastructure supply chain, affecting China’s national security.”

The CAC didn’t go into specifics about the hazards it had identified or which Micron goods they might have an impact on. In a separate note, they said, “Since Micron’s DRAM and NAND products are much less in servers, we believe most of its revenue in China is not generated from telcos and the government. Therefore, the ultimate impact on Micron will be quite limited.”

Since its primary clients in China are companies that produce consumer electronics like smartphones and computers rather than suppliers of infrastructure, Jefferies analysts anticipated an insignificant effect on Micron.

Micron competes with South Korean firms Samsung Electronics Co Ltd and SK Hynix Inc, as well as Japan’s Kioxia, a division of Toshiba Corp, in the production of DRAM and NAND flash memory chips.

Last week, Micron announced a proposal to invest up to 500 billion yen ($3.70 billion) in Japan’s extreme ultraviolet technology. Micron became the first chipmaker to introduce the cutting-edge chip manufacturing technology to the nation which is now looking to revitalise its chip sector.

Joe Biden, the president of the United States, stated on Sunday that the G7 countries had decided to “de-risk and diversify our relationship with China.” The decision-makers also decided to launch a programme to fight economic “coercion.”

In late March, China revealed that it was reviewing Micron’s products. At the time, the corporation said that it was complying and that business as usual was being conducted in China.

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