The White House criticized that the accusation of possible security risks was not based on facts. The Beijing Foreign Ministry pointed out that the US government had blacklisted and sanctioned numerous Chinese companies. Such “economic coercion” is unacceptable.
An influential US MP called for the Chinese memory chip provider CXMT to be placed on the sanctions list. In addition, it must be prevented that companies from third countries replace the missing Micron supplies, said Mike Gallagher, chairman of the China Committee in the US House of Representatives. “The US must make it clear to the People’s Republic of China that it will not tolerate economic coercion against its companies or its allies.” Neither CXMT nor the Chinese Embassy in Washington could immediately be reached for comment.
CXMT is the leading Chinese memory chip manufacturer. However, according to experts, the products are two to three generations behind those of western suppliers such as Micron, Samsung or SK Hynix. The latter two operate plants in the People’s Republic. So far, they have been largely exempt from the US ban on the export of chip-making machines to China. However, these exceptions are limited and can be revoked at any time. Samsung and Hynix could not initially be reached for comment.
According to Micron, the Chinese sanctions will reduce sales in the low to high single-digit percentage range. Last year, the US group achieved revenues of almost 31 billion dollars. According to analysts, Micron does its main business in China with companies that have smartphones and consumer electronics assembled there. Chips from the US company are only used to a small extent in critical infrastructure products such as servers.
In addition, state Chinese documents available to Reuters show that the government has dramatically reduced its orders for Micron memory chips since 2020 and has since been increasingly ordering from domestic and South Korean companies. The documents do not reveal why this was the case and what role the corona pandemic played in this. The Chinese State Council could not initially be reached for comment. In any case, the ban on the US company does not harm the People’s Republic, said Alfredo Montufar-Helu, head of the think tank The Conference Board’s China Center in Beijing. “Most of the chips are easily replaceable with Chinese-made alternatives, and for those that aren’t, there are other foreign manufacturers.”
Micron shares temporarily gained 0.02 percent in NASDAQ trading to $66.02.
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