China’s recent decision to ask critical information infrastructure operators to stop purchasing products from Micron Technology, a US-based semiconductor supplier, is seen by experts as a law-based approach in line with international cybersecurity practices. The move, based on a cybersecurity review, aims to safeguard China’s critical information infrastructure from potential security risks associated with Micron’s products. This decision could potentially reshape China’s memory chip supply chains, opening up opportunities for competitive Chinese memory chip manufacturers like Yangtze Memory Technologies Corp, as well as South Korean companies such as Samsung Electronics and SK Hynix.
The impact on Micron’s business in China is expected to be significant, as Chinese state-owned companies and their affiliates are likely to halt purchases of Micron’s products. The official statement from the Cyberspace Administration of China sends a clear signal about the perceived cybersecurity risks associated with Micron’s offerings. This development comes after China enacted a cybersecurity law in 2016 to safeguard critical information infrastructure in sectors such as telecommunications, transportation, and defense.
While Micron stated that it is evaluating the conclusion of the cybersecurity review, Chinese securities firms anticipate that this decision will benefit Chinese memory chip suppliers and South Korean manufacturers. Micron, as the third-largest global producer of DRAM chips, faces market implications as Chinese companies start to avoid their products, potentially leaving a void for other players.
Overall, this decision reflects the growing global emphasis on cybersecurity and the increasing scrutiny of IT and electronic products. It also highlights the geopolitical dynamics impacting the semiconductor industry, with the US taking measures to curb China’s chip sector while seeking to influence other countries to follow suit, potentially impacting the global chip industry supply chain.
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