U.S. chipmaker Micron is effectively exiting its business for data center server chips in China. On Oct. 17 (local time), Reuters said Micron decided to pull back from the market after business conditions in the local data center institutional sector deteriorated following Chinese government sanctions in 2023.
Reuters, citing multiple sources, reported that "Micron will stop supplying data center customers in China but will continue sales to some Chinese corporations that have large-scale servers outside China." One of them is known to be Lenovo, a Chinese laptop maker. However, Micron plans to continue supplying chips to China's automobile and mobile phone institutional sector.
In response to a request for comment, the company said the "data center institutional sector has been affected by China's ban" and noted it is "complying with regulations in all markets where it operates."
Jacob Bourne, a researcher at market research firm eMarketer, said, "China remains an important market, but the spread of AI is driving a surge in data center demand in other regions such as Asia, Europe, and South America," adding, "Micron can make up the losses there."
Earlier, in May 2023, the Chinese government imposed sanctions on Micron products, citing "serious security issues," and banned operators of the country's critical information infrastructure from using Micron products. This was interpreted as retaliation for U.S.-China trade tensions and sanctions on Huawei.
Reuters said that "investment in data centers in China surged ninefold last year to about $3.4 billion (about 4.8 trillion won), but Micron did not benefit due to the sanctions," adding, "instead, Korean companies such as Samsung Electronics and SK hynix and Chinese state-owned semiconductor corporations reaped windfalls." On the New York stock market that day, Micron shares at one point fell more than 3%.