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China's Cybersecurity Review Office (CRO) concluded on Sunday that U.S. semiconductor maker Micron Technology didn't pass its network security review and has thus barred Micron chips in key infrastructure sectors.
The decision has triggered strong reactions from the U.S. side. American politicians are hyping it up to attack China. The Chair of the House Select Committee on the Strategic Competition Between the U.S. and China Mike Gallagher said on Tuesday that the U.S. Commerce Department should put trade curbs on Chinese memory chip maker Changxin Memory Technologies in retaliation.
Micron's "special status" explains Washington's irritation. Micron is America's biggest maker of memory chips, and a leading enterprise in the global semiconductor industry. The Chinese mainland is one of the largest consumer markets for Micron. According to Reuters, China generates one-fourth of the firm's overall revenue. Micron's annual report suggests the company counted on the Chinese mainland for $3.3 billion in sales in fiscal 2022, an increase of almost 35 percent year-on-year.
As a "leading" U.S. enterprise, Micron has failed to abide by Chinese laws and regulations. According to media reports, CRO's security review found Micron products pose a severe risk to China's infrastructure supply chains and national security. The cybersecurity review of Micron products sold in China by China's cyberspace regulator was implemented in accordance with the law, and the decision was made based on facts, Chinese Foreign Ministry spokesperson Mao Ning said on Wednesday at a regular briefing in Beijing. China's cybersecurity review does not target specific countries or regions, and China does not exclude technologies and products from any country.
Apart from severe security risks, Micron has played an active role in instigating U.S. sanctions on China. From 2018 to 2022, Micron spent $9.5 million in lobbying, with the goal of attacking China's semiconductor manufacturing industry, according to media reports. Micron submitted more than 170 lobbying issues to the U.S. government between 2018 and 2022, of which lobbying content related to China accounted for as much as 67 percent. Micron reported last year that China's Yangtze Memory Technologies Corp (YMTC) was a supplier for Huawei, and the U.S. added YMTC to its entity list.
In the global semiconductor industry, Samsung, Micron, and Hynix are three giants with the final say on the standards and the price of the products. However, YMTC has challenged its monopoly. Micron's calculations in reporting YMTC are self-evident.
As an American firm operating in China, Micron enjoys China's development dividends and has reaped colossal profits from the Chinese market. But in the meantime, Micron colludes with the U.S. government in violation of Chinese laws and regulations to suppress Chinese firms. Upon the release of CRO's decision, Micron saw its stock plummet by almost 7 percent on Monday, sinking into the bear market. Micron has itself to blame for the restrictions.
Since its reform and opening-up, China has been committed to promoting a high-level opening up and creating a market-oriented, legal, and international business environment. China welcomes products and services provided by companies of all countries as long as they comply with Chinese laws and regulations.
For all foreign companies, complying with local laws and regulations is a prerequisite to doing business. As a foreign firm operating in China, Micron must prioritize product upgrades and global growth within legal frameworks. Suppressing other firms in breach of cybersecurity regulations is detrimental and self-defeating. Micron bears responsibility for the restrictions it faces in China.
