China was reducing Micron chip purchases years before ban

In the years before China declared U.S. firm Micron Technology’s (MU.O) products a national security risk, authorities were already scaling back purchases of its chips, opting instead for domestic or South Korean options, documents showed.

A Reuters review of over a hundred public government tenders found that while previously Chinese government authorities regularly put out purchase requests for Micron’s chips for use in projects such as tax systems to surveillance networks, such requests dried up dramatically from 2020.

Instead, the bulk of memory chip purchases from such entities have gone to domestic firms including Huawei Technologies, server maker Inspur (000977.SZ) as well as surveillance giants Uniview and Hikvision (002415.SZ).

While China’s sudden move this week to block key industries from using Micron products appeared to be the result of heightened Sino-U.S. tensions, the tender documents suggest Beijing had laid the groundwork for years, in effect limiting the disruptions caused by such a ban.

At the same time, analysts say the biggest U.S. memory chip maker had become an easier target if Beijing wanted to retaliate against Washington’s curbs on tech exports, given China’s own advances in memory chip production.

This report’s information was first seen on REUTERS; to read more, click this link.