As G7 Ends, China Imposes Sanctions on US Micron... Qualcomm and Intel Also in the Crosshairs (Comprehensive)

On the final day of the Group of Seven (G7) summit on the 21st, China formalized sanctions against Micron, the largest memory semiconductor company in the United States. Citing national security, China, which had been conducting an extensive investigation into Micron for two months, mentioned 'security risks' for the first time and issued a purchase suspension order. As the US-China technological hegemony competition intensifies around semiconductors, there are also prospects that other American companies may become targets of sanctions following Micron.

According to Bloomberg and other sources, the Cyberspace Administration of China (CAC), under the National Internet Information Office, announced that a cybersecurity review of Micron products found relatively serious cyber security risks.

The CAC stated, "We have concluded that Micron products did not pass the internet security review," adding, "(Micron products) have relatively serious network security issues that pose significant security risks to China's critical information infrastructure supply chain and affect national security."

Based on the investigation results, Chinese authorities said that operators of 'critical information infrastructure' must stop purchasing from Micron. According to China's definition of critical information infrastructure, sectors ranging from transportation to finance are included. However, it did not specify exactly which types of companies and businesses this would apply to.

China has been conducting a security investigation into Micron since March. The results came out after about two months, and the impact of the purchase suspension in China?the third largest market after the US and Taiwan?is expected to be inevitable. According to Bloomberg's tally, Micron's sales proportion in the Chinese market accounts for about 11% of its total revenue.

This is the first time China has conducted a cybersecurity review on a foreign semiconductor company. Chinese authorities explained that the reason for conducting the internet security review on Micron products was "to prevent harm to the safety of the country's important basic information infrastructure and is a necessary measure for national security." They also added, "China firmly promotes a high level of openness to the outside world and welcomes companies from all countries to enter the Chinese market as long as they comply with laws and regulations."

China's sanctions targeting American companies this time are seen as a retaliatory measure against US sanctions on China. Analysts interpret this as China using its huge domestic market as a weapon to counterattack the US amid the US and its allies controlling semiconductor equipment exports to China. In October last year, the US effectively banned the export of advanced semiconductor manufacturing equipment to Chinese companies and in December of the same year, placed 36 Chinese companies, including YMTC, China's largest memory semiconductor company, on the export control list.

[Image source=Reuters Yonhap News]

There are also prospects that follow-up sanctions targeting other semiconductor companies may follow after Micron. Holden Triplett, founder of Trenchcoat Advisors and a former FBI intelligence officer stationed in Beijing, pointed out, "The CAC's decision should not be understood solely as retaliation against US semiconductor export controls," adding, "(This political action by Chinese authorities) means that any company could be the next target."

Bloomberg mentioned Qualcomm, Broadcom, and Intel as potential next targets. The news agency reported, "This move by Chinese authorities brings new uncertainty to other American semiconductor manufacturers selling products in China, the world's largest semiconductor market," adding, "Companies like Qualcomm, Broadcom, and Intel supply billions of semiconductor products to China."

Meanwhile, the strong joint statement targeting China at the G7 summit held in Hiroshima, Japan, also appears to have influenced the announcement on this day. After a strong joint statement targeting China was issued the previous day, China boldly formalized the sanctions to coincide with the closing day of the G7 summit.

On the 20th, G7 leaders pressured China comprehensively on issues including Taiwan, economic coercion, the South China Sea, and human rights at the Hiroshima summit. The G7 stated in their declaration, "We are ready to build a constructive and stable relationship with China," and "Cooperation with China is essential," but in detailed areas such as security and economy, the G7 clearly expressed concerns and messages of containment toward China.

This content was produced with the assistance of AI translation services.