China bans major chipmaker Micron from major infrastructure projects

China says products made by US memory chip giant Micron Technology pose a national security risk.

The country’s cyber regulator announced Sunday that America’s largest memory chip maker poses “serious risks to network security.”

This means that the company’s products will be banned from major infrastructure projects in the world’s second largest economy.

It is the first major move by China against a US chip maker, as tensions between Beijing and Washington escalate.

The announcement is the latest development in a deepening dispute between the United States and China over technology that is crucial to economies around the world.

The long-running dispute has seen Washington impose a series of measures against Beijing’s chip industry and invest billions of dollars to boost America’s semiconductor sector.

CAC did not detail the risks it said it had found or in which it had found Micron’s products.

A Micron spokesperson confirmed to the BBC that the company “received a CAC notice following its review of Micron products sold in China”.

“We are assessing the outcome and assessing our next steps. We look forward to continuing to engage in discussions with the Chinese authorities,” they added.

In response, the US government said it would work with allies to address what it called “market distortions for memory chips caused by China’s actions.”

A spokesman for the US Commerce Department said: “We strongly oppose restrictions that have no basis in fact.”

This action, along with recent strikes and targeting of other US companies, is inconsistent with [China’s] Assurances that they open their markets and adhere to a transparent regulatory framework.”

Micron’s share price is down 5.3% in pre-market trading in the US.

However, analysts at Jefferies Investment Banking Group said “the final impact [of the ban] Micron is going to be very limited” because it doesn’t depend on the Chinese government or telecommunications for most of the sales it makes in the country.

However, China is a key market for Micron and it generated about 10% of its sales for the full year. In 2022, Micron reported total revenue of $30.7 billion (£24.6 billion), of which $3.3 billion came from mainland China.

It also has manufacturing facilities in the country.

On Sunday, US President Joe Biden said the G7 nations are looking to “de-risk and diversify our relationship with China.”

“This means taking steps to diversify our supply chains,” he added.

Micron CEO Sanjay Mehrotra attended the summit in Hiroshima as part of a group of business leaders.

Last week, the company said it would invest around 500 billion yen ($3.6 billion; £2.9 billion) to develop the technology in Japan.