Beijing’s decision to ban US company Micron Technology the sale of memory chips to key national industries has increased the tensions in the actual trade conflict with Washington and has pushed up the shares of companies that could benefit from the move.
China’s cyberspace regulator said late on Sunday that Micron, the largest US memory chip maker, had failed its safety review of the network and that would block key infrastructure operators from purchasing from the company.
It did not give details about the risks detected or about the company’s products that would be affected.
Washington condemned the move, but it also helped the shares of Micron’s competitors in China and South Korea, which are benefiting as mainland companies seek memory products from other sources.
“We strongly oppose restrictions that are unfounded”, a spokesman for the US Department of Commerce said in a statement on Sunday.
“This action, along with recent raids and attacks on other American businesses, is inconsistent with (China’s) claims that it is opening its markets and committing to a transparent regulatory framework“, said.
Tensions between Washington and Beijing have risen in recent months following inspections and visits by Chinese authorities to US due diligence firm Mintz Group and management consultancy Bain.
Micron said on Sunday that it had received the review from the regulator and that it hoped to “continue to engage in discussions with the Chinese authorities.”
The company is the First US chipmaker in Beijing’s crosshairs following a series of export controls by Washington on certain US chipmaking components and tools to prevent them from being used to boost China’s military capabilities.
China launched the review in late March against the backdrop of a dispute over chip technology and worsening relations between Washington and Beijing.
The move comes shortly after the Group of Seven countries agreed to “untie, not untie” their economic engagement with China and US President Joe Biden called for an “open hotline” between Washington and Beijing. .
The US Department of Commerce said that would speak directly to the Beijing authorities to clarify their actions.
“We will also engage with key allies and partners to ensure we are closely coordinated to address memory chip market distortions caused by China’s actions,” the department said.
(With information from Reuters)
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