Mon, Apr 03, 2023 page12

• China’s Micron probe ups the ante in rivalry with US

  • Bloomberg
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  Beijing has opened a new front in the escalating semiconductor battle between the US and China, launching a cybersecurity review of imports from the largest US memorychip maker, Micron Technology Inc.

  The move risks further exacerbating tensions between US President Joe Biden’s administration and Chinese President Xi Jinping’s (習近平) government, which have worsened over the past few months, amid Beijing’s threats to Taiwan and an alleged spy balloon shot down over US territory in February.

  The Chinese government said in a statement on Friday that it is conducting the review to ensure the integrity of its information infrastructure supply chain, prevent network security risks and maintain national security.

  

  Micron Technology Inc’s Taichung plant is pictured in an undated photograph.

  Photo: EPA-EFE

  Boise, Idaho-based Micron said in a statement that it was in communication with the Chinese Cyberspace Administration concerning the inquiry and that it is “cooperating fully.

  “Micron is committed to conducting all business with uncompromising integrity, and we stand by the security of our products and our commitments to customers,” it said.

  The world’s biggest economies increasingly see each other’s tech sectors as risks to national security. That has sent Washington rushing to secure its global supply chains and seeking to fence off advanced technology.

  “It’s possible that the investigation of Micron is intended to pressure the US and its allies to tread lightly on export controls,” said Gerard DiPippo, a senior fellow in the Economics Program at the Center for Strategic and International Studies in Washington. “It’s even more likely that Beijing is legitimately worried about China’s reliance on Micron chips, or really any US technology. Expect more actions like this going forward.”

  The US Department of State and the US Department of Commerce’s Bureau of Industry and Security declined to comment on the Chinese action.

  “This seems more political in nature than anything, a rebuttal to recent US actions. In terms of specific security risks for the products sold by Micron, I’m skeptical there’s anything there,” Morningstar Inc equity strategist Abhinav Davuluri said. “China has been investing aggressively to build out its own semiconductor ecosystem, and where we think about areas where they can be most successful, memory is one of them.”

  China’s probe could threaten a potential comeback for Micron and other memorychip makers after a rough stretch.

  Over the past year, a steep drop in consumer demand spurred Micron’s customers to slash orders. China’s rollback of COVID-19-related restrictions was seen as one catalyst to help the industry, as gadget makers would be able to bring manufacturing plants back to normal rhythm.

  Micron last week issued a better-than-expected outlook for this quarter, forecasting sales of as much as US$3.9 billion in the fiscal third quarter compared with an average of analysts’ estimates of US$3.75 billion.

  Micron CEO Sanjay Mehrotra cited expectations for improvements in the balance of supply and demand in the industry.

  The company is the last remaining maker of computer memory based in the US, having survived brutal industry downturns that forced larger companies such as Intel Corp and Texas Instruments Inc to bow out.

  The company has relatively little exposure to China compared with its peers, and it does not use the country as a major manufacturing base.
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