Micron Technology: China Probes US Chip Maker For Cybersecurity Risks As Tech Tension Escalates

How the Biden administration's export ban is hindering China's tech ambitions

AFTER

China has launched a cybersecurity investigation into Micron Technology, one of the largest US memory chip makers, in response to US allies in Asia and Europe announcing new restrictions on key technology sales to Beijing.

The Cyberspace Administration of China (CAC) will review products sold by Micron in the country, the watchdog said in a statement late Friday.

The move aims to "secure supply chains for critical information infrastructure, prevent cybersecurity risks from hidden product issues, and protect national security," he said.

It came on the same day that Japan, an ally of the United States, said it would limit exports of advanced chip-making equipment to countries such as China, following similar moves by the United States and the Netherlands.

Washington and its allies have announced curbs on China's semiconductor industry, which is at the heart of Beijing's bid to become a technological superpower.

Last month, the Netherlands also imposed new restrictions on the sale of semiconductor technology abroad, citing the need to protect national security. In October, the United States banned Chinese companies from buying advanced chips and chip-making equipment without a license.

Micron told CNN it was aware of the review.

"We are in communication with the CAC and are cooperating fully," he said, adding that he is committed to the safety of his products. "Micron's product shipping, design, manufacturing, sales and other functions are operating as normal."

© Courtesy of CNN Micron Technology Shanghai Bureau, August 2019 - VCG/Visual China Group/Getty Images/FILE

Expected risk

Micron shares fell 4.4% on Friday after the news from Wall Street, the biggest drop in more than three months. They closed up another 1.2% on Monday. Micron generates more than 10% of its sales in China.

In an earlier statement, the Idaho-based company warned of the risks.

"The Chinese government could prevent us from participating in the Chinese market or competing effectively with Chinese companies," he said last week.

China has been a vocal critic of curbs on technology exports, saying last month that it "strongly opposes" such measures.

In an effort to spur growth and job creation, Beijing is struggling to attract foreign investment amid mounting economic challenges. New Premier Li Qiang and several top economic officials opened a welcome train for global CEOs, promising they would "provide good conditions and service."

However, Beijing is also increasingly pressuring foreign companies to align with its agenda.

Last month, authorities closed the Beijing office of the Mintz Group, an American corporate intelligence firm, and arrested five local employees.

A few days earlier, they had suspended Deloitte's Beijing operations for three months and fined it $31 million for alleged mistakes in an audit of the troubled sovereign debt manager.

CNN's Michelle To, Junko Ogura, Sandi Sidhu and Chris Lau contributed to this article.

For more CNN news and newsletters, create an account at CNN.com

Huawei's chip dreams are crumbling, its core business is collapsing / The secret way to bypass US sanctions