China Announces Sales Restrictions on Micron Products

China this week banned certain Chinese companies from purchasing products from U.S. semiconductor company Micron, saying they are a national security risk and shouldn’t be used in “critical information infrastructure” projects. The country’s cyberspace regulator said its infrastructure operators “should stop purchasing Micron products” after a Chinese government review found they have “relatively serious potential network security issues, which pose a major security risk” to China, according to an unofficial translation of a May 21 notice. “The purpose of this network security review of Micron's products is to prevent product network security issues from endangering the security of the country's key information infrastructure, which is a necessary measure to maintain national security.”

The restrictions on Micron come as the U.S. implements a sweeping set of export controls on chip-related equipment and services destined to China.

A Micron spokesperson said May 22 that the company is "assessing our next steps. We look forward to continuing to engage in discussions with Chinese authorities.” CFO Mark Murphy said at a conference May 22 that the company wasn’t clear about Beijing’s concerns, Reuters reported, adding that direct and indirect sales to China-based companies accounted for about a quarter of Micron’s revenue. A Commerce Department spokesperson didn’t respond to a request for comment but told Reuters: “We firmly oppose restrictions that have no basis in fact.”