China Bars Purchases of Micron Chips, Escalating US Conflict

"China delivered the latest salvo in an escalating semiconductor war with the U.S.," reports Bloomberg, "announcing that Micron Technology Inc. products have failed to pass a cybersecurity review in the country." In a statement Sunday, Beijing warned operators of key infrastructure against buying the company's goods, saying it found "relatively serious" cybersecurity risks in Micron products sold in the country. The components caused "significant security risks to our critical information infrastructure supply chain," which would affect national security, according to the statement from the Cyberspace Administration of China, or CAC... Chinese officials privately say that the probe of Micron is part of a broader trend toward the dominance of "pro-retaliation" voices in Beijing, where national security concerns increasingly trump economic arguments. "No one should understand this decision by CAC as anything but retaliation for the US's export controls on semiconductors," said Holden Triplett, founder of Trenchcoat Advisors and a former FBI counterintelligence official in Beijing. "No foreign business operating in China should be deceived by this subterfuge. These are political actions pure and simple, and any business could be the next one to be made an example of." The move brings fresh uncertainty to the other US chipmakers that sell to China, the world's biggest market for semiconductors. The article notes pointedly that memory chips "aren't usually considered a cybersecurity risk because they don't require any specific software or run code. They're mostly basic grids of transistors used for storing data and, as such, haven't typically been a vector of attack for hackers." The Associated Press describes China's move as "stepping up a feud with Washington over technology and security," adding that Chinese officials "appear to be struggling to find ways to retaliate without hurting China's smartphone producers and other industries and efforts to develop its own processor chip suppliers," which import more than $300 billion in foreign chips every year. An official review of Micron under China's increasingly stringent information security laws was announced April 4, hours after Japan joined Washington in imposing restrictions on Chinese access to technology to make processor chips on security grounds. Foreign companies have been rattled by police raids on two consulting firms, Bain & Co. and Capvision, and a due diligence firm, Mintz Group. Chinese authorities have declined to explain the raids but said foreign companies are obliged to obey the law.

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