SEOUL/SHANGHAI, Oct 17 (Reuters) – Micron plans to stop supplying server chips to data centers in China after the business did not recuperate from a 2023 government ban on its products in critical Chinese infrastructure, two people briefed on the choice said.
Micron was the primary U.S. chipmaker to be targeted by Beijing – a move that was seen as retaliatory for a series of curbs by Washington aimed toward impeding tech progress by China’s semiconductor industry.
Shares of the chipmaker were down about 1%.
Since then, each Nvidia and Intel chips have similarly fielded accusations from Chinese authorities and an industry group of posing security risks, though there has not been any regulatory motion.
LENOVO TO REMAIN A CUSTOMER
Micron will proceed to sell to 2 Chinese customers which have significant data center operations outside China, certainly one of which is laptop maker Lenovo, the people said.
The U.S. company, which made $3.4 billion or 12% of its total revenue from mainland China in its last business 12 months, will even proceed to sell chips to auto and cell phone sector customers on this planet’s second-largest economy, one person said.
Asked in regards to the exit from its China data center business, Micron said in an announcement to Reuters that the division had been impacted by the ban, and it abides by applicable regulations where it does business.
Lenovo didn’t immediately reply to a request for comment.
“Micron will look for patrons outside of China in other parts of Asia, Europe and Latin America,” said Jacob Bourne, analyst at Emarketer.
“China is a critical market, nonetheless, we’re seeing data center expansion globally fueled by AI demand, and so Micron is betting that it can give you the chance to make up for lost business in other markets,” he added.
U.S.-Sino trade tensions and tech rivalry have only escalated since 2018, when U.S. President Donald Trump began imposing tariffs on Chinese goods during his first term. That very same 12 months, Washington ramped up accusations against Chinese tech giant Huawei (HWT.UL), accusing it of representing a national security risk, imposing sanctions a 12 months later.
Huawei has denied those charges. Nvidia and Intel have also denied charges that their products pose risks to Chinese national security. Micron also said in 2023, before the conclusion of China’s probe, that it stood by the safety of its products.
Currently, the U.S. has sanctioned a whole bunch of Chinese entities. China, which is more reliant on imported tech, has taken far fewer regulatory actions.
LOSING OUT ON CHINA’S AI BOOM
The ban on Micron products in critical infrastructure by China – the world’s second-largest marketplace for server memory – has meant the corporate has missed out on the country’s data center expansion boom.
That’s benefited rivals Samsung Electronics and SK Hynix, in addition to Chinese corporations YMTC and CXMT, which have been aggressively expanding with the support of the Chinese government.
Investment by data centers utilized in computing in China surged ninefold to 24.7 billion yuan ($3.4 billion) last 12 months, in keeping with a Reuters review of presidency procurement documents.
That said, Micron’s challenges in China have been offset by huge demand for data centers and related tools elsewhere, due to the worldwide adoption of artificial intelligence. That’s helped the corporate report record quarterly revenue.
In line with a 3rd source, Micron’s data center team in China employs over 300 people. Reuters was unable to right away establish what number of jobs could also be affected.
Micron has been downsizing in other areas in China. In August, it laid off a number of hundred people in its universal flash storage programme after deciding to stop development of future mobile NAND products globally, in keeping with the South China Morning Post.
Areas where it has continued to expand in China include its chip packaging facility in town of Xian.
“Now we have a powerful operating and customer presence in China, and China stays a crucial marketplace for Micron and the semiconductor industry typically,” Micron said in its statement to Reuters.
($1 = 7.1224 Chinese yuan)
SEOUL/SHANGHAI, Oct 17 (Reuters) – Micron plans to stop supplying server chips to data centers in China after the business did not recuperate from a 2023 government ban on its products in critical Chinese infrastructure, two people briefed on the choice said.
Micron was the primary U.S. chipmaker to be targeted by Beijing – a move that was seen as retaliatory for a series of curbs by Washington aimed toward impeding tech progress by China’s semiconductor industry.
Shares of the chipmaker were down about 1%.
Since then, each Nvidia and Intel chips have similarly fielded accusations from Chinese authorities and an industry group of posing security risks, though there has not been any regulatory motion.
LENOVO TO REMAIN A CUSTOMER
Micron will proceed to sell to 2 Chinese customers which have significant data center operations outside China, certainly one of which is laptop maker Lenovo, the people said.
The U.S. company, which made $3.4 billion or 12% of its total revenue from mainland China in its last business 12 months, will even proceed to sell chips to auto and cell phone sector customers on this planet’s second-largest economy, one person said.
Asked in regards to the exit from its China data center business, Micron said in an announcement to Reuters that the division had been impacted by the ban, and it abides by applicable regulations where it does business.
Lenovo didn’t immediately reply to a request for comment.
“Micron will look for patrons outside of China in other parts of Asia, Europe and Latin America,” said Jacob Bourne, analyst at Emarketer.
“China is a critical market, nonetheless, we’re seeing data center expansion globally fueled by AI demand, and so Micron is betting that it can give you the chance to make up for lost business in other markets,” he added.
U.S.-Sino trade tensions and tech rivalry have only escalated since 2018, when U.S. President Donald Trump began imposing tariffs on Chinese goods during his first term. That very same 12 months, Washington ramped up accusations against Chinese tech giant Huawei (HWT.UL), accusing it of representing a national security risk, imposing sanctions a 12 months later.
Huawei has denied those charges. Nvidia and Intel have also denied charges that their products pose risks to Chinese national security. Micron also said in 2023, before the conclusion of China’s probe, that it stood by the safety of its products.
Currently, the U.S. has sanctioned a whole bunch of Chinese entities. China, which is more reliant on imported tech, has taken far fewer regulatory actions.
LOSING OUT ON CHINA’S AI BOOM
The ban on Micron products in critical infrastructure by China – the world’s second-largest marketplace for server memory – has meant the corporate has missed out on the country’s data center expansion boom.
That’s benefited rivals Samsung Electronics and SK Hynix, in addition to Chinese corporations YMTC and CXMT, which have been aggressively expanding with the support of the Chinese government.
Investment by data centers utilized in computing in China surged ninefold to 24.7 billion yuan ($3.4 billion) last 12 months, in keeping with a Reuters review of presidency procurement documents.
That said, Micron’s challenges in China have been offset by huge demand for data centers and related tools elsewhere, due to the worldwide adoption of artificial intelligence. That’s helped the corporate report record quarterly revenue.
In line with a 3rd source, Micron’s data center team in China employs over 300 people. Reuters was unable to right away establish what number of jobs could also be affected.
Micron has been downsizing in other areas in China. In August, it laid off a number of hundred people in its universal flash storage programme after deciding to stop development of future mobile NAND products globally, in keeping with the South China Morning Post.
Areas where it has continued to expand in China include its chip packaging facility in town of Xian.
“Now we have a powerful operating and customer presence in China, and China stays a crucial marketplace for Micron and the semiconductor industry typically,” Micron said in its statement to Reuters.
($1 = 7.1224 Chinese yuan)
