China Bans US Chipmaker Micron From Infrastructure Projects

Facts

• A PRC regulator has announced that US computer chip manufacturer Micron has been banned from use in domestic infrastructure projects.¹
• In a statement, the Cyberspace Administration of China announced that Micron products — which include semiconductors and solid-state hard drives — pose "serious network security risks," and that "operators of critical information infrastructure" should stop purchasing from Micron.²
• Micron, the first US chipmaker to face Chinese restrictions, said that it is "continuing to engage in discussions with Chinese authorities." This move comes after the US enacted a series of export controls to stop the use of American components in the Chinese defense industry.³
• Around 10% of Micron's $30.8B revenue in 2022 came from China, mainly from sales to manufacturers. It is unclear if the ban will affect that revenue.⁴
• The US Dept. of Commerce has stated that the Cyberspace Administration of China accusations "have no basis in fact." Chinese chipmakers saw their shares rise in light of the news, as the PRC looks to boost its domestic semiconductor industry.⁵
• In 2021, China imported $430B in semiconductors, with the global market forecasted to reach $1T by 2030.⁴

Sources: ¹BBC News, ²Guardian, ³Al Jazeera, ⁴France 24, and ⁵CNN.

Narratives

• Anti-China narrative, as provided by War on the Rocks.
• China lacks the domestic capacity to produce high-tech chips for its military. Beijing is further isolating itself from the global semiconductor industry by lashing out at one of America's biggest chipmakers. Despite the massive cash flows into the industry, there is little evidence of a worthy payoff due to scientific and institutional constraints. This move against Micron is a nationalistic blunder that will harm the country in the long run.
• Pro-China narrative, as provided by Global Times.
• The Micron case is an isolated incident that will not affect China's willingness to do business with the world or its advanced technology industries. Micron failed a routine national security review, as Beijing seeks to have some of the most secure cyberinfrastructures in the world. China welcomes businesses in all industries, provided they comply with China's prudent regulations.