BEIJING (Reuters) – China has been scaling back its purchases of Micron Technology (NASDAQ:MU) chips for years, opting instead for domestic or South Korean options, documents showed. This week, China declared Micron’s products a national security risk and blocked key industries from using them.
The Reuters review of over a hundred public government tenders found that while previously Chinese government authorities regularly put out purchase requests for Micron’s chips, such requests dried up dramatically from 2020. Instead, the bulk of memory chip purchases from such entities have gone to domestic firms including Huawei Technologies, server maker Inspur as well as surveillance giants Uniview and Hikvision.
Analysts say the biggest U.S. memory chip maker had become an easier target if Beijing wanted to retaliate against Washington’s curbs on tech exports, given China’s own advances in memory chip production.
China’s cyberspace regulator, which conducted the review of Micron’s products, did not specify what security risks they found. In response to Reuters’ request for comment, a Micron spokesperson said the company was “assessing next steps” in response to the ban.
China has for over a decade had a long-running campaign to reduce reliance on foreign technologies, asking state affiliated firms such as banks to switch to local software and promoting domestic chip manufacturing. This week’s ban appears to be the result of heightened Sino-U.S. tensions, but the tender documents suggest Beijing had laid the groundwork for years.
On Monday, Micron forecast a percentage hit to revenue from China’s action in the single digits.