U.S. chipmaker Micron (MU.O) intends to cease supplying server memory chips to data centers within China, according to two informed sources, after its business failed to recover from a 2023 Chinese government ban on its products in critical information infrastructure.
Micron was the initial U.S. semiconductor firm to be sanctioned by Beijing—a move widely perceived as retaliation for a series of Washington-led restrictions designed to hinder the progress of China’s tech and semiconductor sectors.
The chipmaker’s shares declined 1.4% in premarket trading following the news.
Subsequent to the action against Micron, products from rivals Nvidia and Intel have also faced allegations from Chinese authorities and an industry association of presenting potential security risks, though no formal regulatory measures have been taken against them thus far.
According to the sources, Micron will continue its supply agreements with two specific Chinese clients that maintain substantial data center operations outside of China, one of which is laptop manufacturer Lenovo.
The company, which derived $3.4 billion or 12% of its total revenue from mainland China in its last fiscal year, will also continue to sell its chips to customers in the automotive and mobile phone sectors within the world’s second-largest economy, one person stated.
When questioned about its withdrawal from the China data center business, Micron said in a statement to Reuters that the division had been affected by the ban and emphasized that it complies with all applicable regulations in the countries where it operates.
Lenovo did not immediately respond to a request for comment.
Trade tensions and technological rivalry between the U.S. and China have intensified since 2018, when President Donald Trump first imposed tariffs on Chinese imports. That same year, Washington escalated its accusations against Chinese tech giant Huawei (HWT.UL), alleging it represented a national security risk and imposing sanctions the following year.
Huawei has denied these allegations. Similarly, Nvidia and Intel have refuted charges that their products threaten Chinese national security. Prior to the conclusion of China’s cybersecurity review in 2023, Micron also stated that it stood by the security of its products.
