Micron Pulls Back from China Server Chip Market
Micron Technology (MU.O) plans to stop supplying server chips to data centres in China after its business failed to recover from a 2023 ban on its products in critical Chinese infrastructure, according to sources familiar with the matter.
The ban marked Micron as the first U.S. chipmaker targeted by Beijing, seen as a response to U.S. restrictions aimed at curbing China’s semiconductor growth.
China’s Regulatory Pressure on Global Chipmakers
Following Micron, Nvidia (NVDA.O) and Intel (INTC.O) have faced accusations of security risks by Chinese authorities, though no regulatory action has been taken.
Micron will continue selling chips to key Chinese customers with significant data centre operations outside China, including laptop manufacturer Lenovo (0992.HK). The company will also serve auto and mobile phone sector clients in China.
Impact of China Ban on Micron
The ban on critical infrastructure products has caused Micron to miss out on China’s rapidly growing data centre market, benefiting competitors like Samsung Electronics, SK Hynix, YMTC, and CXMT, which have expanded aggressively with government support.
Investment in China’s data centre computing sector surged ninefold to 24.7 billion yuan ($3.4 billion) last year, according to government procurement records.
Global Demand Offsets China Challenges
Despite setbacks in China, global demand for data centres and AI-related tools has driven record revenue for Micron. Its data centre team in China employs over 300 staff, though potential job impacts due to this exit remain unclear.
Micron continues to invest in chip packaging facilities in Xi’an, while downsizing other programs, including mobile NAND product development, as part of its global restructuring.
Micron’s Statement
Micron emphasized in a statement:
“We have a strong operating and customer presence in China, and China remains an important market for Micron and the semiconductor industry in general.”
