SEOUL/SHANGHAI (Reuters) – Beijing’s decision to ban US company Micron Technology Inc from selling memory chips to key domestic industries raised tensions in an ongoing trade dispute with Washington and sent the companies’ shares higher. who can be benefitted by this measure.
China’s cyberspace regulator said late Sunday that Micron, the biggest US maker of memory chips, had failed its network security review and barred major infrastructure operators from buying from the company.
It did not provide details about the vulnerabilities detected or the company’s products affected.
Washington opposed the move, but it also helped shares of Micron’s competitors in China and South Korea, which benefit as mainland companies look for memory products from other sources.
“We strongly oppose unfounded sanctions,” a spokeswoman for the US Commerce Department said in a statement on Sunday.
“This action, along with recent raids and attacks on other US companies, is inconsistent with (China’s) claims that it is opening up its markets and committed to a transparent regulatory framework,” it said.
Tensions between Washington and Beijing have risen in recent months following inspections and visits by Chinese officials from US due diligence firm Mintz Group and management consultant Bain.
Micron said on Sunday that it had received the review from the regulator and expected to “continue discussions with Chinese authorities.”
The company is the first US chipmaker to be targeted by Beijing following a series of export controls imposed by Washington on some US chipmaking components and equipment to prevent them from being used to boost China’s military capabilities.
China launched the review in late March against a backdrop of a dispute over chip technology and deteriorating relations between Washington and Beijing.
The move comes shortly after the Group of Seven nations agreed to “open up, not freeze” their economic ties with China and US President Joe Biden called for an “open hotline” between Washington and Beijing.
The US Commerce Department said it would speak directly with officials in Beijing to clarify its actions.
“We will also engage with key allies and partners to ensure that we are closely coordinated to address distortions to the memory chip market caused by China’s actions,” the department said.