Hong Kong Media:”The First Time Chinese Government Took Action”

A statement released by the China Cyberspace Administration on the last day of March shook the chip industry in the United States and geopolitical analysts in Washington. The statement announced a security review of the products of Micron, a major storage chip manufacturer in the United States.
The South China Morning Post in Hong Kong emphasized “for the first time”: this is the first time that the Chinese government has taken action against a US semiconductor company.
Regarding the announcement of launching a network security review of Micron’s products sold in China, the statement from the China Cyberspace Administration clearly states that the network security review implemented by Meiguang aims to “ensure the security of key information infrastructure supply chain”, “prevent potential product problems from causing network security risks”, and “maintain national security”.

About 11% of Micron’s sales come from Chinese Mainland. As soon as the statement was released, Micron’s stock price in New York fell 4.4%, the largest daily decline in more than three months.
The American public opinion community first expressed a sense of nervousness. Bloomberg said this indicates that Beijing has opened up a new front in the constantly escalating chip war between the United States and China.
Network security censorship is a daily work authority owned by the China Cyberspace Administration, but it cannot withstand the fact that American media have become guilty at first. Some directly speculate in the title that “censorship of Micron or retaliation against US sanctions”.
It’s not difficult to understand why American media are so guilty. What has the US government done to Chinese high-tech enterprises in recent years? It’s nothing more than blatant commercial protection and political suppression! So this time, we didn’t need to say anything, and the Americans themselves fully associated and explained. For example, Bloomberg listed the following paragraphs in its news review of Micron in China as the “background” of this incident:
The United States has blacklisted many Chinese technology companies in an attempt to cut off the flow of complex processor chips into China and prohibit its citizens from providing certain assistance to the Chinese chip industry.
Washington has also wooed allies, and Japan announced earlier on Friday that it will expand restrictions on the export of cutting-edge chip manufacturing technology. Another major supplier to the chip tripartite agreement, the Netherlands, has also followed the lead of the United States and decided to implement similar restrictions.
Gerard DiPippo, Senior Researcher at the Economic Program of the Center for Strategic and International Studies in Washington, said: ‘The investigation into Micron may be aimed at putting pressure on the United States and its allies to exercise caution in export controls.’ ‘More likely, Beijing has reason to worry about China’s dependence on Micron chips or other American technologies. It is expected that there will be more such actions in the future.’
“China’s review comes at a time when US lawmakers are considering imposing a ban on TikTok, a social media platform owned by ByteDance Co., Ltd., headquartered in Beijing…”

In addition, there is also an important background, which is the Micron Company, headquartered in Boise, Idaho, which has played an inglorious role in the US technology war against China in recent years.
In a Bloomberg report on April 1st, there was an introduction to Micron: “The US government believes that Micron Technology is a victim of ‘economic espionage’ by Chinese chip manufacturer Fujian Jinhua. The company was blacklisted by Washington four years ago and is suspected of conspiring to steal trade secrets from a US company
The South China Morning Post reported on the same day that one important reason why Micron has received attention from Chinese regulatory authorities is that the company “actively participated in lobbying the US government to sanction Chinese companies”. The most famous case is that when Micron framed Taiwan, China’s United Power Company for “stealing” Micron’s technology and handed it to Fujian Jinhua, the US government placed the Fujian company on the sanctions list, leading to its production interruption.
Chinese companies that have been suppressed by Micron in recent years also include SMIC International, Changjiang Storage, and others. Micron is recognized as a company that is good at using political means to suppress its rivals. As early as the 1980s, during the period of fierce competition between American and Japanese Semiconductor, Micron also cleared the way for its products by complaining to the United States Department of Commerce about the “dumping” of Japanese companies such as Fujitsu, Hitachi, Toshiba, and Panasonic.
It is not yet known how the Chinese government’s review will proceed, but the impact on Micron may not be too small. In the words of Bloomberg, after Micron has weathered a difficult period of sharp decline in global consumer demand over the past year, the review by the Cyberspace Office will once again extinguish the hope that Micron has ignited after optimizing epidemic prevention measures in China.
In 2022, Micron ranked sixth among global chip companies in terms of revenue, but its performance was not ideal. Micron announced plans to lay off 10% of its workforce at the end of December last year, and in February this year, it corrected it to “expect layoffs to approach 15%”. There are also reports that Micron will receive subsidies from the US government’s Chip and Science Act. They will expand their Boise headquarters and build a new factory there, as well as another new factory near Syracuse, New York. However, these factories are expected to be fully operational by the end of this decade (before 2030).
Mainland Chinese securities institutions are optimistic that the review of Micron this time will greatly benefit domestic storage chip companies.
At the same time, the US media is nervously evaluating who will be the next US chip manufacturer to be subject to Chinese government scrutiny?
“The following are the U.S. chip manufacturers most affected by the escalation of tensions between China and the United States.” In another article, Bloomberg listed the U.S. chip manufacturers most dependent on China’s business. Among them, Qualcomm ranked first with 64% of its sales coming from the Chinese Mainland market.
Paula Pencar, a senior semiconductor analyst at Bloomberg, said that after all, Micron’s direct sales in Chinese Mainland only accounted for 11% of its total sales. “If China really wants to crack down on the U.S. chip industry, it may involve a broader range of fields”.