China bans chip maker Micron, payback for Huawei?

In a turn of events, China has announced a ban on US-based chip maker, Micron, this move might be related to Huawei and other Chinese companies. This ban comes amid the tension between the two countries continuing to rise in the trade war.

On Sunday, the Cyberspace Administration of China (CAC) said that US memory chipmaker Micron Technology had failed in its network security review. This leads the authority to ban Micron from participating in key infrastructure. Also, prohibits Chinese firms from buying components from the chipmaker.

Micron, which makes DRAM and NAND products is now in the middle of the US-China trade fight, which is identical to what we’ve seen with Huawei.

Huawei Ban:

Back in 2019, Huawei and other key Chinese companies were banned by the US commerce department. It alleges Huawei network equipment as a “national security threat” while the tech maker has repeatedly denied this allegation.

Later on, the US suspended all trade and purchases from Huawei, which affected its revenue and business in various markets. It seems like China has also reviewed its own security measures in the wake of geo-political changes. Subsequently, it banned Micron.

“The review found that Micron’s products have serious network security risks, which pose significant security risks to China’s critical information infrastructure supply chain, affecting China’s national security,” the Cyberspace Administration of China (CAC) said in a statement.

Micron:

The chipmaker said it has received a notice from CAC and it is continuously engaging with Chinese authorities. It is now expecting a high hit in revenue following China’s decision to ban. Micron’s stock fell below and close down to 2.8% at $66.23 on Nasdaq on Monday.

“We are currently estimating a range of impact in the low single-digit percentage of our company’s total revenue at the low end and high single-digit percentage of total company revenue at the high end,” said Micron, Micron’s Chief Financial Officer.

SK Hynix and Samsung:

These two South Korean companies are now trending in the stock market. Specifically, both SK Hynix and Samsung saw 0.9% and 2.1% up stock. However, the US is also urging these two to not fill in the chipset requirement in China left by Micron.

To be honest, the US was the first one to ban Huawei and others, and China is taking its own steps to sum score with Micron and there might be more in the making. Eventually, it’s bad for firms and various businesses.

(source)