China Criticizes Micron... US Strongly Opposes, Suggests "Allied Joint Response"

The U.S. Department of Commerce strongly opposed China's sanctions against Micron, the largest memory semiconductor company in the United States, suggesting a joint response with allied countries.

On the night of the 21st (local time), the U.S. Department of Commerce issued a statement saying that China's claim that Micron poses a national security threat is "not based on facts" and "strongly opposes these sanctions."

It further criticized, "Along with recent raids and targeted investigations by Chinese authorities on U.S. companies' offices in China, these measures contradict China's claims of opening its domestic market and committing to transparent regulatory systems."

The U.S. Department of Commerce said it would request an explanation from Chinese authorities regarding this matter and emphasized, "We will engage with key allies and partners to closely coordinate responses to distortions in the memory semiconductor market caused by China's actions."

[Image source=Reuters Yonhap News]

Earlier, the Cyberspace Administration of China (CAC), under the National Internet Information Office, announced that Micron's products failed to pass the internet security review due to relatively serious security issues, and based on the investigation results, operators of "critical information infrastructure" must stop purchasing Micron products.

Chinese authorities defined critical information infrastructure as including sectors from transportation to finance but did not specify exactly which types of companies or businesses this would apply to.

Regarding this, Paul Triolo, a China expert at the global consulting firm Albright Stonebridge Group, said, "It is unclear how broadly Chinese authorities define critical information infrastructure," and predicted, "It could encompass transportation, finance, energy, and data centers."

In March, Chinese public security raided the Beijing office of the U.S. corporate investigation firm Mintz Group, in April raided Bain & Company's Shanghai office, and on the 8th conducted a search of the consulting firm Capvision.

Bloomberg News analyzed that while the U.S. is controlling semiconductor equipment exports to China together with its allies, China has retaliated by weaponizing its huge domestic market. The U.S. effectively banned exports of advanced semiconductor manufacturing equipment to Chinese companies in October last year and added 36 Chinese companies, including YMTC, China's largest memory semiconductor company, to the export control list in December of the same year.

Micron's sales proportion in the Chinese market is about 10%, making China the third-largest market after the U.S. and Taiwan, and the impact of the purchase suspension in China is expected to be inevitable.

There are also forecasts that follow-up sanctions targeting other semiconductor companies may follow after Micron. Holden Triplett, founder of Trenchcoat Advisors and a former FBI agent stationed in Beijing, said, "The CAC's decision should not be understood as retaliation against U.S. semiconductor export controls. This is a political move, and any company could be next as an example."

Bloomberg also reported that other U.S. companies supplying semiconductors to China, the world's largest market, such as Qualcomm, Broadcom, and Intel, could also become future targets of sanctions.

Meanwhile, the announcement of sanctions against Micron by Chinese authorities came just one day after the Group of Seven (G7) leaders issued a statement pressuring China comprehensively on issues ranging from non-market policies to Taiwan, the South China Sea, and human rights. Sanjay Mehrotra, CEO of Micron, attended this G7 summit as part of the corporate delegation.