Micron announced it is looking to invest around $600m over the next few years in its chip packaging facility in the Chinese city of Xian – claiming it was committed to working in China.
The largest chipmaker in the US was previously targeted by the Cyberspace Administration of China (CAC), which claimed that Micron failed its network security review.
The regulator said the company represented “serious network security risks” and said it would bar key infrastructure operators from purchasing from the chipmaker.
The action by CAC represents the first significant move against Micron as the US-China tech war intensifies.
“The review found that Micron’s products have serious network security risks, which pose significant security risks to China’s critical information infrastructure supply chain, affecting China’s national security,” the CAC said in a statement.
Micron posted news of its upcoming Chinese plant investment on WeChat, according to Reuters.
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The post included a quote by CEO Sanjay Mehrotra which said: “This investment project demonstrates Micron’s unwavering commitment to its China business and team.”
The CAC did not specify what risks it claimed to have discovered or which products it found them in, according to the BBC.
A Micron spokesperson confirmed that the company had “received the CAC’s notice following its review of Micron products sold in China,” the BBC reported.
“We are evaluating the conclusion and assessing our next steps. We look forward to continuing to engage in discussions with Chinese authorities,” they added.
The US government stated it would cooperate with allies to address what it said were “distortions of the memory chip market caused by China’s actions”.
A US Commerce Department spokesperson said: “We firmly oppose restrictions that have no basis in fact.”
Adding: “This action, along with recent raids and targeting of other American firms, is inconsistent with [China’s] assertions that it is opening its markets and committed to a transparent regulatory framework.”
Alongside the China announcement, Micron said it will commit at least $1bn towards setting up an India-based chip packaging factory.
The investment could be announced by Prime Minister Narendra Modi, during his visit to the US next week, according to Bloomberg.