Home Uncategorized China Retaliates Against US Chip Maker Even as It Expresses Openness

China Retaliates Against US Chip Maker Even as It Expresses Openness

China Retaliates Against US Chip Maker Even as It Expresses Openness

China made its commitment to trustworthiness with the world clear when it held back-to-back official receptions for both American and European business leaders for their annual economic forums last week. Premier Li Qiang presented the official statement, claiming that the country will “open its doors wider and wider” to promote economic relationships with other countries. However, the same Chinese officials were also sending a much different message to the US after revealing their cybersecurity investigation into Micron Technology on Friday.

Located in Boise, Idaho, Micron Technology is a top-tier US chip producer and has been a symbol of international silicon supremacy. Its memory chips are used to power major operations such as cell phones, computers, data centers, cars, and other electronics. Its relationship to China has been long-standing ever since it opened its Xi’an manufacturing plant in 2006. With Micron now at the center of a heated technological dispute, China is taking measures to protect their country and its business executives.

Senator James Risch (R-Idaho) expressed his disapproval of these actions with a statement that pinpointed China’s display of aggression. The stock value of Micron has been significantly affected since the news, as well as many investors feeling a negative impact. Nonetheless, the company released a statement focusing on the normalcy of the current operations in China, and the compliance and cooperation of their networks to the authorities.

Despite Micron’s long-term relationship to the Chinese market, the Idaho-based tech giant had been reducing their presence in the country since 2018, when the US Justice Department investigated Chinese and Taiwanese companies that US authorities reported were stealing Micron trade secrets. This reduction in presence has included downsizing staff, closing down their Shanghai design center, and announcing plans for $100 billion chip plant in New York City—all of which are indicators of Micron’s intention to limit the Chinese market.

The response to the Micron case has prompted a variety of reactions, ranging from foreign businesses, investors, and analysts. Analysts of technology research firm Gavekal Dragonomics point out that these “varied tactics” send a message to foreign markets, using both “carrots” and “sticks” to approach trade. For instance, with Micron’s departure from China, domestic semiconductor firms have seen higher stock prices as a result.

Samm Sachs, a senior fellow at Yale Law School, states that there is so much uncertainty when it comes to Chinese regulations, with no known criteria of specific outcomes. This uncertainty can be intimidating for foreign businesses, who are contemplating the ultimate outcome of these measures and the repercussions they may face. In spite of these tensions, the US must remain vigilant in maintaining its position in the global semiconductor industry to ensure a successful outcome.