Hyunjoo Jin and Brenda Goh
SEOUL/SHANGHAI (Reuters) – Micron plans to stop supplying server chips to data centers in China after the business failed to recover beyond 2023. government ban on its products in critical Chinese infrastructure, two people briefed on the decision said.
Micron was the first U.S. chipmaker to be targeted by Beijing, a move seen as retaliation for restrictions imposed by Washington aimed at hindering technological advances in China’s semiconductor industry.
Since then, both Nvidia and Intel chips have faced similar accusations of security risks from Chinese authorities and an industry group, though no regulatory action has been taken.
LENOVO HAS REMAINED A CUSTOMER
Micron will continue to sell to two Chinese customers with large data center operations outside China, one of which is laptop maker Lenovo, the people said.
The US company, which earned $3.4 billion from mainland China last business year. USD, or 12% of its total revenue, and will also continue to sell chips to customers in the automotive and mobile phone sectors in the world’s second-largest economy, one of the people said.
Asked about the exit from its China data center business, Micron said in a statement to Reuters that the ban had affected the unit and that it was complying with applicable regulations when operating.
Lenovo did not immediately respond to a request for comment.
US-China trade tensions and technology competition have only escalated since 2018, when US President Donald Trump began imposing tariffs on Chinese goods during his first term. That same year, Washington stepped up its accusations against Chinese tech giant Huawei, accusing it of posing a threat to national security, and imposed sanctions a year later.
Huawei has denied these allegations. Nvidia and Intel have also rejected accusations that their products pose a risk to China’s national security. Micron also said in 2023 that it stands by the safety of its products before ending the China investigation.
Currently, the US has imposed sanctions on hundreds of Chinese entities. China, which is more dependent on imported technology, has taken much less regulatory action.
CHINA INTRODUCING THE DI BOOM
After China, the world’s second-largest server memory market, banned Micron products from critical infrastructure, the company missed out on the country’s data center expansion boom.
This has benefited rivals Samsung Electronics and SK Hynix, as well as Chinese companies YMTC and CXMT, which have been aggressively expanding with the support of the Chinese government.