China to examine US chipmaker Micron's products for cybersecurity risks

(Reuters) -China's cyberspace regulator will conduct a cybersecurity review of products sold in the country by U.S. memory chip manufacturer Micron Technology Inc (NASDAQ:MU), the regulator said on Friday.

The move, which comes amid a spat over chip technology between Washington and Beijing, is aimed at protecting the security of the supply chain for critical information infrastructure, prevent hidden risks and safeguard national security, the Cyberspace Administration of China (CAC) said in a brief statement.

It gave no other details, including which Micron products it was reviewing.

In a statement to Reuters, Micron said it was aware of the announcement and was "in communication with the CAC and are cooperating fully." It added that it stands by the security of its products and commitments to customers.

The U.S. has imposed a series of export controls on chipmaking technology to China for fear it could be used to produce chips for applications such as artificial intelligence which could be used by China's military, and blacklisted a number of China's largest chip firms, including Micron rival Yangtze Memory Technologies Co Ltd.

Micron, one of the world's largest memory chip makers, did not respond immediately to a request for comment. The company's shares fell 3% to $61.15 on Friday.

"Punitive actions against Micron could suggest a broader shift in Chinese policy with other U.S. vendors with large Chinese exposure now potentially at risk of similar actions," Wedbush Securities analyst Matthew Bryson said.

On Friday, Japan announced it would align its technology trade controls with a U.S. push to curb China's ability to make advanced chips. The Netherlands, which makes advanced lithography equipment critical for the manufacture of advanced chips, made a similar announcement earlier this month.

Weak consumer demand has roiled the memory chip market, which is dominated by South Korea's Samsung Electronics (OTC:SSNLF).

Micron derives around 10% of its revenue from China, but it was not clear if the review would affect the company's sales to non-Chinese customers in the country.

The larger chunk of the company's products flowing into China are being purchased by non-Chinese firms for use in products manufactured in the country, according to analysts.

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Micron has offices in Shanghai and Shenzhen, as well as a chip packaging facility in the city of Xian. In early 2022, the company announced it would shut its DRAM design operations in Shanghai.