Following Beijing’s move to restrict some imports of goods from U.S. memory chipmaker Micron, China’s chip stocks increased on Monday morning.
After conducting a security analysis, China’s Cyberspace Administration prohibited operators of “critical information infrastructure” in China from purchasing goods from the American chip giant.
Micron goods, according to Chinese regulators, failed their examination of their network security, citing “serious potential network security issues.” According to a statement, the company “affects [its] national security” and poses a “major security risk” to China’s crucial information infrastructure supply chain.
Hua Hong Semiconductor, which is listed in Hong Kong, increased as much as 3.14% on Monday, while SMIC increased as much as 2.64%. Shares of Chinese chipmakers generally increased on Monday as a result of the action.
Other Chinese manufacturers of memory chips, including GigaDevice Semiconductor and Ingenic Semiconductor, saw increases of 3.74% and 8.08%, respectively.
Gina Raimondo, the secretary of commerce for the United States, responded to Beijing’s statement by telling the Wall Street Journal, “We firmly oppose restrictions that have no basis in fact.” He said that the trade department will speak with the Chinese government to “detail” its stance and obtain further information.
According to Raimondo, the United States will work with its major allies to confront Beijing’s efforts, and that doing so will result in “distortions of the memory chip market.”
The Financial Times stated that the United States apparently asked South Korean chipmakers not to make up the shortages in China if Beijing’s ban takes effect.
On Monday morning, the stock prices of Micron competitors SK Hynix and Samsung Electronics in South Korea increased.