China fails to check Micron’s products in a security review, and is blocking some purchases

BEIJING (Reuters) – China’s cyberspace regulator said on Sunday that products made by U.S. memory chip maker Micron Technology (MU.O) had failed its network security review and that it would prevent major infrastructure operators from buying from the company.

According to China’s broad definition of critical information infrastructure, this can include sectors ranging from transportation to finance.

“The review found that Micron’s products have serious network security risks, which pose significant security risks to China’s critical information infrastructure supply chain, affecting China’s national security,” the China Cyberspace Administration (CAC) said in a statement.

Micron said it has received CAC’s notice that it has completed its review of the company’s products sold in China, and “looks forward to continuing to participate in discussions with Chinese authorities.”

The CAC did not provide details about the risks it found nor which Micron products would be affected.

China announced its review of Micron products in late March. The company said at the time that it was cooperating and that its business operations in China were normal.

The US and Chinese governments are in a dispute over chip technology. Washington has imposed a series of export controls on chipmaking technology to China and has moved to block Micron’s rival Yangtze Memory Technologies from buying certain US components.

Micron derives about 10% of its revenue from China, but it is not clear if the decision affects the company’s sales to non-Chinese customers in the country.

According to analysts, the bulk of Micron’s products flowing into China are purchased by non-Chinese companies for use in products manufactured there.

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China in September 2021 imposed rules aimed at protecting critical information infrastructure, which require its operators to comply with stricter requirements around areas such as data security.

Beijing has broadly defined industries it considers “critical” such as public communications and transportation but has not specified exactly what type of company or scope of business this will apply to.

(Reporting by Kevin Yau; Editing by Elaine Hardcastle)

Our standards: Thomson Reuters Trust Principles.

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