US chipmaker, Micron, plans to stop the supply of server chips to data centres in China after facing losses post a 2023 ban by the Chinese government on its products in critical Chinese infrastructure, quoted a leading international news agency.
However, Micron will continue to sell to two Chinese customers that have significant data centre operations outside China, one of them being laptop maker, Lenovo, the agency further shared. It will also continue to sell chips to auto and mobile phone sector customers in the world’s second-largest economy.
The US company, which made $3.4 billion of its total revenue from mainland China in its business last year, was the first to be targeted by Beijing after Washington began placing curbs on its fast-progressing semiconductor industry.
Since then, other American chipmaker giants like Nvidia and Intel have faced accusations from Chinese authorities and an industry group of posing security risks, though there hasn’t been any regulatory action so far. Both firms deny charges that their products pose risks to Chinese national security.
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In a statement, Micron said that the company had been affected by the China ban, and that it abides by applicable regulations where it does business. Its data centre team in China employs over 300 people, but it laid off a few hundred in August after deciding to cease development of future mobile NAND products globally, a Chinese daily reported.
It continues to expand in China in its chip packaging facility in the city of Xian.
“We have a strong operating and customer presence in China, and China remains an important market for Micron and the semiconductor industry in general,” Micron said in a statement to the news agency.
Micron’s loss in China’s data centre expansion boom will mean benefits to rivals Samsung and SK Hynix, as well as Chinese companies YMTC and CXMT, which have the Chinese government’s backing.
Investment by data centres used in computing in China surged nine-fold last year to $3.4 billion, according to the news agency’s review of government procurement documents.
However, Micron is expected to make up for its China losses by demand elsewhere, thanks to a global boom for AI.
The China-US trade relations are at an all-time low currently, having escalated since 2018 when US President Donald Trump began imposing tariffs on Chinese goods during his first term. He returned this year with reinforced commitment to ramp-up tariffs, adding port fees and sanctions on hundreds of Chinese entities. China, on the other hand, has taken far fewer regulatory actions but warned Washington that it will respond to US sanctions in equal measure.
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