Micron Technology Inc (NASDAQ:MU) has failed China’s network security review, according to the Cyberspace Administration of China (CAC). The decision could affect sectors ranging from telecoms to transport and finance, as per China’s broad definition of critical information infrastructure.
Jefferies analysts expect limited impact on Micron as its major customers in China are consumer electronics firms such as smartphone and computer manufacturers, not infrastructure suppliers.
The CAC did not provide details on what risks it had found nor what Micron products would be affected. The decision comes amid a dispute over chip technology between Washington and Beijing, and during a summit of the Group of Seven (G7) leaders in Japan.
Micron derives around 10% of its revenue from China, but it is not clear if the decision affects the company’s sales to non-Chinese customers in the country. China in September 2021 imposed rules aimed at protecting critical information infrastructure, which require their operators to comply with stricter requirements around areas such as data security.
The U.S. government has yet to comment on the CAC’s decision. It remains to be seen if the G7’s efforts to “de-risk and diversify our relationship with China” will be successful.