China bans major chip maker Micron from key infrastructure projects, what's the impact?
Three brief paragraphs posted by the Cyberspace Administration of China to its website on Sunday night outlined the latest round of digital paranoia between Beijing and Washington, with Boise-based $Micron Technology (MU.US)$ the most-recent victim. The company's shares are down more than 6% in pre-market trading.
Micron products have relatively serious potential network security issues," the CAC said without elaborating. "Operators of national critical information infrastructure should stop purchasing Micron products."
Micron is the world's third-largest supplier of dynamic random-access memory chips, DRAM, an $81 billion slice of the global semiconductor market. It's also fifth in the $60 billion NAND Flash memory business, according to Taipei-based market researcher TrendForce.
Micron got just 11% of its revenue from China last fiscal year, or about $3.3 billion. Additionally, most of the chips it sells in China get exported straight back out within the bowels of desktop PCs, laptops, servers and smartphones. A minority are destined to stay inside the country, and only a sliver of those would end up in the "critical information infrastructure" the CAC alludes to in its announcement.
The move brings fresh uncertainty to the other US chipmakers that sell to China, the world's biggest market for semiconductors. Companies like $Qualcomm (QCOM.US)$, $Broadcom (AVGO.US)$ and $Intel (INTC.US)$ deliver billions of chips to the country, which puts the components inside electronic products that are shipped all over the world.
We believe this ban is narrowly focused as it applies to only CII operators," analysts at Jefferies including Edison Lee said in a research report. "Therefore, the ultimate impact on Micron will be quite limited."
Source: Bloomberg, TrendForce
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CLtwo : US government may ban companies using US technology if they using YMTC and CXMT chips to counter back.
Bird007 CLtwo :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
michael khor : even if they did. the impact is too small for US to wage it. the market is controlled by samsung, sk hynix n micron. china would have only decided to ban when they can self suffice or depend on sk hynix/samsung who is not under US control.
CLtwo michael khor : Why do you think Samsung and SKH won't listen to US government?