China's cybersecurity regulator, the Cyberspace Administration of China (CAC), has imposed a ban on Chinese firms purchasing chips from Micron Technology (NASDAQ:MU), a US memory manufacturer.
The CAC claims that Micron's products pose "significant network security risks" to critical Chinese information infrastructure, including state-owned banks and telecom operators.
This ban is widely perceived as a retaliatory measure in response to the sanctions imposed by the US on Chinese chipmakers.
In October, Washington issued a comprehensive order that restricted US companies from supplying semiconductor chips, chipmaking devices and updates for previous sales to Chinese companies.
Furthermore, the order-imposed restrictions on American citizens from working for Chinese semiconductor firms.
a 'Tit-for-Tat' move
This ban is the latest development in the ongoing conflict between the US and China concerning semiconductor technology.
The Biden administration has recently taken steps to restrict China's access to advanced chipmaking equipment.
In January, officials from the US, the Netherlands and Japan agreed to tighten export controls on lithography machines produced by ASL, Nikon and Tokyo Electron.
In pursuit of avenues for retaliation against the US, China has targeted Micron as a consequential entity, leveraging alternative suppliers such as South Korea's SK Hynix and Samsung (KS:005930) to fulfil any market void created by a potential ban on Micron Technology's chip sales.
Anticipating this retaliatory move, the US has previously approached South Korea, requesting that it encourage its chipmakers not to fill any market gap in China if Beijing indeed implements a ban on memory chipmaker Micron Technology.