China chip stocks rally after Beijing states Micron is ‘security threat’

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China chip stocks rally after Beijing says Micron is 'security risk'

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Micron Technology Double-Data-Rate Synchronous Random-Access Memory (SDRAM) chip

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China’s chip stocks rallied on Monday early morning following Beijing’s statement to disallow some purchases of items from U.S. memory chipmaker Micron

China’s Cyberspace Administration disallowed operators of “critical information infrastructure” in China from purchasing items from the U.S. chip giant following a security evaluation performed by the Cyberspace Administration of China.

Chinese authorities stated Micron items have actually failed its network security evaluation, and pointed out “serious potential network security issues.” The company positions a “major security risk” to China’s crucial details facilities supply chain and impacts [its] nationwide security,” a declaration stated.

Shares of Chinese chipmakers mostly increased on Monday following the relocation: Hong Kong- noted Hua Hong Semiconductor increased as much as 3.14% on Monday, while SMIC increased 2.64%.

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Other memory chip manufacturers in mainland China such as GigaDevice Semiconductor and Ingenic semiconductor leapt 3.74% and 8.08% respectively.

In action to Beijing’s statement, the U.S. Commerce Department’s representative stated, “We securely oppose constraints that have no basis in truth.” The department will engage with the Chinese government to ” information” its position and look for more clearness, they included.

The representative included that the U.S. will engage with its crucial allies to address Beijing’s actions, which such procedures will trigger “distortions of the memory chip market.”

This comes as the U.S. supposedly advised South Korean chipmakers not to fill the deficiencies in China if Beijing’s restriction enters into impact, the Financial Times reported.

Shares of South Korean chipmakers SK Hynix and Samsung Electronics, both Micron competitors, increased on Monday early morning.

Correction: This story has actually been upgraded to show attribution to the U.S. Department of Commerce representative.