News JVTech China counterattacks the United States by paying it with its own currency: it investigates its largest chipmaker
We have been talking for days about the war that the West is waging against China. But it’s his turn to counterattack one of the biggest memory chip manufacturers in the USA. A blow that could hurt.
China and the United States are waging an unprecedented technological war
The agreement between the United States and China is at its lowest in years. A diplomatic and technological war is being played out and it is difficult to see the end of the conflict. On the one hand, the USA is doing everything to handicap China and prevent them from accessing cutting-edge technologies. On the other, China is joining forces with other powers to counterattack and above all to block American companies like what happened with Huawei.
In the end Huawei gets up and China does not let it go.
The Netherlands refusing to supply the machines
that only they have to make extremely thin chips are still a very big blow. China is thus seeking to have its independence also on manufacturing machines. This is currently their main challenge, but the lead that ASML has taken is colossal and it may take time.
Thus, if they cannot, for the moment, defend themselves, then they must attack. This is exactly what just happened. As with the blocking of Huawei by part of the world, China is about to do the same.
Biggest US memory chip maker in Chinese sights
The Cyberspace Administration of China has just announced an investigation against Micron. It is the largest manufacturer of memory chips in the United States. This is justified by wanting “safeguard supply chain security of key information infrastructure and prevent cyberspace security risks from problematic products.”
In other words, the Chinese government suspects Micron of wanting to hinder China’s technological advance. Even to the point of having made sure to penalize competing companies in China to gain an advantage. A sort of three-horse within the country itself.
But beyond this potential ban on Micron, which would certainly be very expensive, it is above all a strong signal that is sent to other countries. We can thus name Japan and South Korea, which have both joined the US-led alliance, Chip 4. This implies that they have to be careful with their companies, like Samsung, which manufactures a lot in China.
China strikes at the right time
Micron is also, according to the Chinese government, at the origin of this historic alliance. Information in the newspaper
South China Morning Post
talk about an increased lobbying budget following the election of Joe Biden. At the same time, they would have received funding of 52 billion dollars to return to US territory. This led to the closure of the Shanghai chip design center at the end of 2022. A relocation which is not surprising. The USA also wants to regain sovereignty over its national production.
Except that China strikes at the best moment against Micron. The results of the company are at their lowest because of the violent decline 3D NAND prices which we have detailed in two previous articles dedicated to both
to SSDs
and to
RAM memory
. China accounts for 10% of Micron’s revenue and it could cost them dearly.
The first step, if China realizes as a result of its investigation that Micron was at fault, would be a fine. If no change is made, it could lead to inadmissibility. Micron, for its part, ensures to cooperate and give all the necessary information to the Chinese regulator.
The war is far from over and each country plays with its own commercial and diplomatic weapons to gain advantage in the coveted chip market.
