China probe of US chipmaker seen as escalation of tech battle, warning to others; Taiwan president navigates tensions in US visit & Russia uses China-linked armor in Ukraine -- China Boss News 4.03.23
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China's probe of US chipmaker Micron seen as escalation in tech battle, warning to South Korea, Netherlands
Analysts say China’s cybersecurity probe of US memory chip-maker Micron Technology announced on Friday is a retaliation against Washington’s export controls on semiconductor technology to China. The investigation is being conducted by the Cyberspace Administration of China (CAC) "on 'national security' grounds," following a Chinese diplomat’s warning of “consequences” for Dutch officials last month if they, like Japan, joined Biden’s curbs, Financial Times said.
FT:
The Netherlands and Japan in January reached a deal with the US regarding semiconductor exports, with the latter unveiling restrictions on 23 types of equipment on Friday. The deal is designed to cut off China’s access to advanced chips that could be used in sophisticated weaponry and machines.
CNN said CAC announced its probe "on the same day that Japan, a US ally, said it would restrict the export of advanced chip manufacturing equipment to countries including China." Micron was awarded $320 milllion in subsidies by Japan late last year as part of a plan to boost cooperation between Japanese and US tech firms.
The subsidies were described by FT’s analysts at the time as a “deepening” of the Japan-US “chip alliance” amid their ongoing attempts “to diversify semiconductor production away from China.”
FT:
The Micron deal announced on Friday followed months of negotiations between the US and Japan to expand co-operation in semiconductor production, with the goal of reducing heavy dependence on Taiwanese chipmaker TSMC.
The notice came within 48 hours of a meeting in Tokyo between US vice-president Kamala Harris and senior executives of more than a dozen Japanese technology groups to discuss the Chips and Science Act passed by the US Congress in July, which offers $52bn in grants to support advanced semiconductor manufacturing in the US.
“We have to diversify our reliance on essential supplies, Japan, the United States and the world. We also understand, on this issue, that no one country can satisfy the globe’s demand,” said Harris at the start of the meeting on Wednesday.
South China Morning Post yesterday said that Micron "has become the first foreign semiconductor company to be put under a cybersecurity review by China,” and the moved risked further elevating tensions with Washington.
Wang Lifu, an analyst at Shanghai-based semiconductor research firm ICwise, told SCMP that South Korea and the Netherlands were also in mind when Chinese regulators announced the Micron probe.
SCMP:
For Korean memory chip makers Samsung Electronics and SK Hynix, which still have manufacturing facilities in China, the investigation provided a cautionary sign not to follow US actions, he said.
That caution would also extend to the Netherlands, following a reported agreement between the Dutch, Japanese and US governments to restrict exports of some advanced chip-making machinery to China. That has created a powerful new alliance that could undercut Beijing’s ambitions to build up China’s domestic chip capabilities.
For the rest of FT’s report, China escalates tech battle with review of US chipmaker Micron, click here. For CNN’s coverage, Micron Technology: China probes US chip maker for cybersecurity risks as tech tension escalates, click here. To read FT’s 2022 update, Japan grants Micron $320mn in deepening US chip alliance, click here, and for SCMP’s explainer published yesterday, Why China opened an investigation into US semiconductor firm Micron Technology, click here.
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