China defends ban on US chipmaker Micron, accusing Washington of “economic coercion”.

BEIJING — China’s government on Wednesday defended its ban on U.S. memory chipmaker Micron Technology Inc.’s products in some computer systems, after Washington raised concerns that added to tensions over technology and security.

The safety review of Micron products was “conducted in accordance with the law,” said Mao Ning, a spokesman for the Foreign Ministry.

The Cyberspace Administration of China said on Sunday that Micron products pose unspecified security risks, but did not provide details. Banned them from computers handling sensitive information.

It comes after Washington, Japan and the Netherlands blocked China’s access to technology needed to make advanced processor chips on security grounds, as the ruling Communist Party threatens to attack Taiwan and is more assertive with its Asian neighbors.

“China’s cyber security review is not targeted at specific countries or regions,” Mao said. “We do not exclude technologies and products from any country.”

Companies on both sides were hit by supply disruptions and loss of sales.

Restrictions on access to chips and devices by Washington and its allies are hampering China’s efforts to develop its own chip industry. US manufacturers have lost billions of dollars in potential sales to Chinese smartphone makers, chip foundries and other customers.

Mao complained that the United States had imposed restrictions on more than 1,200 Chinese companies for security reasons “without any basis in fact.” He accused Washington of misusing national security as an excuse to “unreasonably suppress Chinese companies.”

“This is economic coercion and is unacceptable,” Mao said.

State Department spokesman Matthew Miller said Monday that the U.S. government is “directly in contact” with Beijing to “clarify our position” on the Micron ban.

“We have very serious concerns,” Miller said. Referring to the People’s Republic of China, he said: “This action does not seem consistent with the People’s Republic of China’s claims that it is open to business and committed to a transparent regulatory framework.”

Micron is working with the Chinese regulator and assessing the impact of the ban, according to its chief financial officer, Mark Murphy.

“It’s no longer clear what the security concerns are,” Murphy said on a JP Morgan technology industry conference call. “We have had no complaints from our customers regarding the safety of our products.”

Micron estimates it could cause a single-digit percentage of total revenue in lost sales, but the final number depends on which customers and products are affected, Murphy said.

On Tuesday, Foreign Minister Qin Gang asked his Dutch counterpart to access chip-making technology that has been blocked for security reasons.

All China needs is a machine available from a single Dutch company, ASML Holding NV, which uses ultraviolet light to etch microscopic circuits on next-generation chips. Without it, the ruling party’s efforts will be limited to developing chips for smartphones, artificial intelligence and other advanced applications.

“China has serious concerns about this,” Qin said. “We must work together to jointly protect the normal trade order between us” and “keep global industrial and supply chains stable.”

Dutch minister Wopke Hoekstra said he “shares our national security concerns” and gave no indication that his government’s position had changed.

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Micron Technology Inc.: www.micron.com