Micron Technology: China investigates US chipmaker over cybersecurity risks as tech tensions escalate

Hong Kong
CNN
—

China has launched a cybersecurity investigation into Micron Technology, one of the largest U.S. memory chipmakers, in apparent retaliation after U.S. allies in Asia and Europe announced new restrictions on the sale of key technologies to Beijing.

The Cyberspace Administration of China (CAC) will review products sold by Micron in the country, according to a statement released by the watchdog late Friday.

The move aims to “ensure the security of key information infrastructure supply chains, prevent cybersecurity risks caused by hidden product issues, and maintain national security,” he noted.

The move comes on the same day that U.S. ally Japan announced it would limit the export of advanced chip-making equipment to countries including China, following similar moves by the United States and the Netherlands.

Washington and its allies have announced restrictions on China’s semiconductor industry, striking at the heart of Beijing’s drive to become a technology superpower.

Last month, the Netherlands also unveiled new restrictions on overseas sales of semiconductor technology, citing the need to protect national security. In October, the United States banned Chinese companies from purchasing advanced chips and chipmaking equipment without a license.

Micron told CNN it was informed of the investigation.

“We are in communication with the CAC and are cooperating fully,” it said, adding that it stands by the safety of its products. “Micron’s product shipments, engineering, manufacturing, sales and other functions are operating normally.”

Actions in Micron shares fell 4.4% on Friday on Wall Street after the news, the biggest drop in more than three months. On Monday, they closed down 1.2%. Micron generates more than 10% of its revenue in China.

In a previous filing, the Idaho-based company warned of such risks.

“The Chinese government could prevent us from participating in the Chinese market or competing effectively with Chinese companies,” he said last week.

China has strongly criticized restrictions on technology exports, saying last month that it “firmly opposes” such measures.

To boost growth and job creation, Beijing is seeking to attract foreign investment as it faces growing economic challenges. New Premier Li Qiang and several senior economic officials have enthusiastically welcomed the international CEOs and promised they would “provide a quality environment and services.”

But Beijing is also putting increasing pressure on foreign companies to comply with its agenda.

Last month, authorities closed the Beijing office of Mintz Group, a U.S. corporate intelligence firm, and arrested five local employees.

Days earlier, they suspended Deloitte’s operations in Beijing for three months and fined it $31 million for alleged failings in its audit of a troubled state-owned debt manager.