Micron Technology (NASDAQ:MU) is planning to end the supply of server chips to data centers in China following the 2023 government ban, according to a Friday report from Reuters citing two sources familiar with the matter.
The company will continue to sell to two Chinese clients that operate major data centers outside of China, one of which is Lenovo Group (HK:0992), Reuters said. Micron will also maintain its sales to China’s automotive and mobile phone industries. Last year, the country accounted for roughly 12% of Micron’s total revenue.
China’s 2023 ban on Micron chips in “critical infrastructure” was widely interpreted as retaliation for U.S. export restrictions on chips and AI technology introduced under the Biden administration.
Since then, NVIDIA Corporation and Intel Corporation have encountered similar obstacles from Chinese regulators, particularly as U.S.-China trade tensions have intensified under the Trump administration this year. In October, reports indicated that Chinese customs authorities ramped up efforts to block imports of U.S.-made chips, aligning with Beijing’s push for its “AI plus” self-sufficiency strategy in the artificial intelligence sector.
Server chips play a critical role in AI development, powering data centers that run advanced AI applications.
Micron has lost market share to competitors Samsung Electronics and SK Hynix in recent years when it comes to serving Chinese firms. However, the company recently posted record revenue in its fiscal fourth quarter, supported by surging global demand for server and memory chips outside China.
As one of the world’s largest producers of server and memory chips, Micron has been a key beneficiary of the ongoing AI-driven boom in semiconductor demand.
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