China imposes sales restrictions on Micron

China has banned the U.S. chip maker Micron from selling to Chinese companies, stating that “the U.S. chip maker had failed to pass a cybersecurity review.” The Cyberspace Administration of China (CAC) announced this decision on Sunday: “The review found that Micron’s products have relatively serious cybersecurity risks, which pose significant security risks to China’s critical information infrastructure supply chain and would affect national security.” This marks the first instance in history where China has imposed restrictions on U.S. chip companies."

China's move shows its determination not to be pushed back by U.S. semiconductor technology control, practically declaring a chip war. China, which has been relatively cautious about countering U.S. measures that keep it in check, now appears to be responding in full swing. The Chinese government, which initiated a security review on Micron in March, announced the results right after the G7 meeting. It is hard not to see this as a retaliatory measure against the U.S., which has been at the forefront of the anti-China front.

Micron's sales to China accounted for 11% of its total revenue, amounting to 3.3 billion U.S. dollars last year. Therefore, its potential loss in the Chinese market would significantly impact. In addition, last year, China's leading memory chip maker, Yangtze Memory Technologies Co (YMTC), was added to the US trade blacklist with restrictions on the export of semiconductor equipment to China. Both countries justify these restrictions by citing national security concerns, but it is ultimately a battle for dominance, aiming to secure an advantage in cutting-edge technology within the future core industry.

This major escalation of an ongoing battle between the world's top two economies puts Korea in a very difficult and delicate position. China's restriction on Micron serves as a warning to the world that any country could face a similar response. The U.S. Commerce Department has emphasized the importance of a joint response with allies, stating, “We will also engage with key allies and partners to ensure close coordination in addressing distortions in the memory chip market caused by China's actions.” Foreign media reports indicate that the U.S. has asked Korea to urge Korean firms not to fill the supply gap following China's ban on Micron. Samsung and SK hynix find themselves in a dilemma, caught in the middle of the U.S. and China, and faced with the challenge of making a choice.

The cruel reality of the international community, where political and diplomatic clashes erode economic principles amid a new Cold War, cannot be ignored. However, national interests should not be undermined due to factional battles. The U.S. would not want Chinese firms to gain significant influence by restricting chip supplies from Korean firms. The government should employ this mindset to convince the U.S. and respond resolutely to China's economic pressure by formulating a practical economic security strategy. Simultaneously, we should spare no effort in developing and maintaining exceptional technologies unaffected by external forces.