In what appears to be retaliation for new restrictions on the sale of key technology to Beijing from U.S. allies in Asia and Europe, China has started a cybersecurity probe into Micron Technology, one of the biggest American memory chip makers.
According to a statement released by the watchdog late on Friday, Micron products distributed in China will be subject to review by the Cyberspace Administration of China (CAC).
This action is being taken to “ensure the security of key information infrastructure supply chains, prevent cybersecurity risks due to hidden product problems, and maintain national security,” as the document puts it.
It was announced on the same day that the United States and the Netherlands had implemented export restrictions on machinery used in the production of sophisticated semiconductors to countries like China.
The semiconductor industry is at the center of Beijing’s ambitions to become a tech powerhouse; yet, Washington and its allies have declared restrictions on the Chinese semiconductor market.
New limits on the export of semiconductor technology were announced in the Netherlands last month for the same reason (national security). The United States has prohibited Chinese firms from acquiring license-free advanced chips and chipmaking machinery since October.
Micron informed that it was aware of the investigation.
Company officials have said, “We are in communication with the CAC and are cooperating fully,” and that they are confident in the safety of their products.
Potential Dangers
On Friday, after the news broke, Micron’s stock dropped 4.4% on Wall Street, its biggest decline in more than three months. More than 10% of Micron’s income comes from China.
The Idaho-based firm had previously filed a notice of such dangers.
Warning that “the Chinese government may restrict us from participating in the China market or may prevent us from competing effectively with Chinese companies,” it said last week.
Last month, China issued a statement in which it “firmly opposes” export limits on technologies.
Beijing is trying to attract foreign investments to increase development and create jobs as the Chinese economy faces growing pressures. Premier Li Qiang, along with other top economic officials, has been extending a warm welcome to business leaders around the world, assuring them that they will “provide a good environment and services.”
China’s capital, Beijing, has increased its pressure on multinational corporations to comply with its policies.
Five local employees of Mintz Group, a US corporate intelligence company, were detained and the Beijing office was closed last month.
Deloitte had its Beijing activities suspended for three months and a $31 million fine levied days earlier due to allegations of negligence in the firm’s audit of a state-owned distressed debt manager.