China’s Micron ban revives US trade tensions, fuels Asian chip rally

  • A move by Beijing to bar U.S. firm Micron Technology Inc from selling memory chips to key domestic industries has ramped up tensions in an ongoing trade spat with Washington and lifted shares of firms that could benefit from the move.
  • China’s cyberspace regulator said on 21 May that Micron, the biggest U.S. memory chipmaker, had failed its network security review and that it would block operators of key infrastructure from buying from the company.
  • Beijing’s decision was opposed by Washington but also helped stocks of Micron’s rivals in China and South Korea, which are seen benefiting as mainland firms seek memory products from other sources.
  • The company is the first U.S. chipmaker to be targeted by Beijing after a series of export controls by Washington on certain American components and chipmaking tools to block them being used to advance China’s military capabilities.
  • China launched the review in late March amid a dispute over chip technology and worsening relations between Washington and Beijing.
  • The move also comes shortly after the Group of Seven nations agreed to “de-risk, not decouple” economic engagement with China and as U.S. President Joe Biden called for an “open hotline” between Washington and Beijing.
  • The U.S. Commerce Department said it would speak directly with authorities in Beijing to clarify their actions.

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