Hong Kong (CNN) China has launched a cybersecurity investigation into Micron Technology, one of America’s largest memory chip makers. in apparent retaliation after US allies in Asia and Europe announced new restrictions on key technology sales to Beijing.
The Cyberspace Administration of China (CAC) will review products sold by Micron in the country, the watchdog said in a statement late Friday.
The move aims to “ensure the security of supply chains of key information infrastructure, prevent cybersecurity risks from hidden product issues, and maintain national security,” it said.
It came on the same day that Japan, a US ally, said it would restrict exports of advanced chipmaking equipment to countries like China, after the United States and the Netherlands took similar steps.
Washington and its allies have announced restrictions on China’s semiconductor industry that go to the heart of Beijing’s quest to become a tech superpower.
Last month, the Netherlands also unveiled new restrictions on overseas sales of semiconductor technology, citing the need to protect national security. In October, the United States banned Chinese companies from buying advanced chips and chip-making equipment without a license.
Micron told CNN that it was aware of the review.
“We are in communication with the CAC and are fully cooperating,” it said, adding that it stands by the safety of its products. “Micron’s product shipping, engineering, manufacturing, sales and other functions are operating as usual.”
Micron Technology Shanghai office in August 2019
risks expected
shares in Micron fell 4.4% on Wall Street on Friday following the news, its biggest drop in more than three months. They closed another 1.2% lower on Monday. Micron generates more than 10% of its sales in China.
In a previous filing, the Idaho-based company warned of such risks.
“The Chinese government could prevent us from participating in the Chinese market or from competing effectively with Chinese companies,” it said last week.
China has slammed restrictions on technology exports, saying last month it “strongly opposes” such measures.
To spur growth and job creation, Beijing is seeking foreign investment as it grapples with mounting economic challenges. Newly minted Premier Li Qiang and several top business officials rolled out the welcome cart for global CEOs, promising they would “provide a good environment and services.”
But Beijing is also putting increasing pressure on foreign companies to bring them into line with its agenda.
Last month, authorities shut down the Beijing office of Mintz Group, a US corporate intelligence firm, and arrested five local employees.
Days earlier, they suspended Deloitte’s operations in Beijing for three months and fined it $31 million over alleged failures to audit a state-owned distressed debt manager.
CNN’s Michelle Toh, Junko Ogura, Sandi Sidhu and Chris Lau contributed to the article.