China’s Internet regulator, the Cyberspace Administration (CAC), has banned critical infrastructure operators from using chips made by US semiconductor company Micron. The decision comes after a network security review found that Micron’s products pose a “significant security risk” to China’s critical information infrastructure supply chain. Sectors such as telecommunications, transportation, and finance could be affected by the ban. The CAC cited the Network Security Act introduced in September 2021 that placed stricter requirements on operators in areas such as data security. However, it did not give details of what risks it had found or in which Micron products it had found them.
Micron said in response that it had received the CAC’s notice and was “assessing the conclusion and evaluating our next steps.” Meanwhile, the US government said it would work with allies to address “distortions in the memory chip market caused by China’s actions.” The United States has imposed a series of export controls on Chinese chip companies that seek to prevent them from developing advanced manufacturing capabilities amid rising tensions between the two countries.
The CAC announcement came a day after G7 leaders issued a joint statement criticizing China’s use of “economic coercion.” On Sunday, US President Joe Biden said G7 countries were seeking to “de-risk and diversify our relationship with China,” including “taking steps to diversify our supply chains.”
According to Silicon UK, political tensions between China and the United States are at an all-time high. It remains unclear how this latest development will affect Micron’s operations in China or its relationship with other Chinese companies. However, given its importance as a supplier of memory chips for smartphones and other electronic devices, any disruption could have significant consequences for both consumers and businesses around the world.
Thus, while there is no doubt about the importance of protecting national security interests, governments must also ensure that their policies do not harm legitimate businesses or disrupt global supply chains. It is imperative that both China and the United States work towards finding a mutually acceptable solution to their ongoing trade disputes, rather than resorting to unilateral actions that could have unintended consequences for all parties involved.