U.S.-based chip firm Micron placed under Chinese cybersecurity review

China's cyberspace authority said on Friday that it is commencing a review of products sold in the Chinese market by U.S.-based memory chip maker Micron to ensure supply chain security for key information infrastructure and to ward off cybersecurity risks.

The review is being conducted in accordance with China's state security law, cybersecurity law, and cybersecurity review measures, the Cyberspace Administration of China said in a statement posted on its website on Friday.

Zuo Xiaodong, vice president of the China Information Security Research Institute, told the Global Times on Friday that whenever the government detects a potential hazard that could endanger or compromise national security, it is necessary to conduct an investigation, so the review is reasonable and appropriate.

Although the cybersecurity regulator did not provide specific details, Zuo said that possible reasons for the watchdog to initiate the review include foreign companies' products sold in China having risks of being manipulated, data thefts, and potential disruption on supply chains due to political, diplomatic or trade issues, or compromised transparency on products that could endanger China's national security, among other moves that are forbidden by laws and regulations.

The review may signal the increasing attention that large countries like China and the U.S. attach to cybersecurity amid tension over technology, Xin Haiguang, an independent IT industry observer, told the Global Times on Friday.

"I think it is a normal action. There are quite a few cases of countries censoring each other because of cybersecurity, as it is becoming an increasingly important part of national security," Xin said.

Micron's sales revenue dropped by 53 percent in the second fiscal quarter ended March 2 to $3.7 billion, as weak PC and smartphone demand continued to weigh on company results, it revealed in a recent financial report.

Micron is reportedly cutting its workforce by 10 to 15 percent as a result.

Shares in Micron, the largest U.S. maker of memory chips, dropped by nearly 3 percent in pre-market trading on Friday.

In July 2022, regulators fined ride-hailing giant Didi 8.03 billion yuan ($1.2 billion) for violating cybersecurity and data laws after a review that lasted for about one year during which the company had to cease new user registration.

In June 2022, the cybersecurity regulator conducted a cybersecurity review of China National Knowledge Infrastructure (CNKI), the country's largest academic research database.

The company was fined 87.6 million yuan, or 5 percent of its 2021 domestic sales revenue, for abusing its dominant market position by China's top market regulator in December.

The review came as the U.S. kept escalating a technology war against China, with export control measures placed on exports to China, adding Chinese technology firms onto its entity list, and offering subsidies to high-tech companies that set up production capacity in the U.S.

Last week, U.S. lawmakers also probed TikTok, the social-media platform owned by Beijing-based ByteDance Ltd.