Micron Technology plans to cease supplying server memory chips to data centres in mainland China, following a prolonged impact from a 2023 government ban on its products in critical infrastructure. The decision, confirmed by two individuals familiar with the matter, marks a strategic shift in the company’s operations in the region.
The ban, imposed by Chinese authorities citing national security concerns, made Micron the first U.S. chipmaker to be targeted in what was widely interpreted as a retaliatory move against Washington’s restrictions on China’s semiconductor industry. Since then, other U.S. firms including Nvidia and Intel have faced similar accusations, though no formal regulatory action has followed.
Micron, which generated USD 3.4 billion or 12 per cent of its annual revenue from mainland China last year, will continue to supply chips to two Chinese customers with significant data centre operations outside China. One of these is Lenovo, though the company has not responded to requests for comment. Micron will also maintain its business with Chinese clients in the automotive and mobile phone sectors.
In a statement to Reuters, Micron acknowledged the impact of the ban on its data centre division and stated that it complies with applicable regulations in all markets where it operates. The company’s data centre team in China currently employs over 300 people, though the extent of job reductions remains unclear.
The exit comes amid a surge in China’s domestic data centre investment, which rose ninefold to 24.7 billion yuan (USD 3.4 billion) last year, according to government procurement data reviewed by Reuters. This expansion has benefited competitors such as Samsung Electronics, SK Hynix, and Chinese firms YMTC and CXMT, which have received state support.
Micron’s broader operations in China have also seen restructuring. In August, the company laid off several hundred employees from its universal flash storage programme after halting development of future mobile NAND products globally. However, it continues to invest in its chip packaging facility in Xian.
Despite the setback in the data centre segment, Micron has reported record quarterly revenue, driven by rising global demand for AI-related infrastructure. The company reiterated its commitment to the Chinese market, stating, “We have a strong operating and customer presence in China, and China remains an important market for Micron and the semiconductor industry in general.” |
