The Chip War

The Chip War

According to Iran Gate, China has banned one of the main American chip manufacturers, Micron Technology, from major infrastructure projects in the country because it believes the company’s products pose a serious risk to network security.

This is China’s first decision to ban an American technology manufacturer and follows the restrictions set by the U.S. Department of Commerce last fall, where the U.S. government introduced a set of new rules. These rules require manufacturers to obtain export licenses from the U.S. Department of Commerce to supply semiconductor equipment and chip manufacturing equipment to Chinese companies. Similar rules and the creation of strict export restrictions on equipment and technology to Beijing have also been implemented by the Netherlands and Japan.

This technology company will suffer significant losses due to this halt in operations, as according to the Financial Times, Micron earns 25% of its revenue from the markets in China and Hong Kong.

Beijing, citing serious cybersecurity risks and with the aim of reviewing products sold in the country, halted the activities of the American company Micron. According to the National Cybersecurity Regulatory Authority, by doing this, key information technology infrastructure operators should stop purchasing Micron products.

In March, the Chinese government publicly announced its initiative to cooperate with Micron, the largest memory producer in the United States, to support its information technology supply chain and national security.

Some analysts, quoting British economic newspapers, say that in the increasing trade tensions between the United States and China, what is now called the chip war, Micron is likely to be the first target because its technology can easily be replaced by its South Korean rivals like Samsung and SK Hynix.

The Cyberspace Administration of China (CAC) announced this ban on Sunday, stating that reviews have shown Micron’s products pose significant security risks to China’s critical information infrastructure supply chain and affect China’s national security. However, Chinese officials did not provide details on the specific risks or which Micron products create this risk.

According to Micron, the ban on using its chips only applies to Chinese companies, so foreign companies operating in China will not be subject to this ban. Micron also stated that it will continue negotiations with Chinese officials.

The U.S. Department of Commerce has also described this action as contrary to Chinese officials’ statements about free trade and transparency. China’s decision was announced while the leaders of the G7, at the end of their meeting in Hiroshima, Japan, strongly criticized the human rights situation in China, its economic policies, and Beijing’s increased military presence in the waters of East and Southeast Asia.

Despite signs of a desire to improve and warm relations on the sidelines of the G7 summit from the United States, it is likely that this ban could increase the level of tension between Beijing and Washington.

U.S. President Joe Biden, in the last press conference of this summit, said he expects an improvement in relations with China in the short term, emphasizing that there has been no change in stance regarding Taiwan and its independence or the One China policy. He also referred to the issue of Russia, adding that we urge all parties to resolve issues through peaceful means.