22 May 2023
If you are covering China’s ban of some Micron products, please see the following comment from Ben Barringer, equity research analyst at Quilter Cheviot:
“Following a cyber security investigation China has decided to ban certain Micron memory products from the country, which will come as no surprise to many as it probably represents a retaliatory move following US restrictions on China’s access to technology.
“Around 11% of Micron’s revenue comes from China but we shall see how much this ban actually impacts its revenue because the ban is currently for domestic critical information infrastructure operators which is essentially used for defence, military and utilities. However, if this is broadened then it could put a dent in the company’s future revenues.
“The second unknown is the memory market is very homogenous. The two other major producers of similar technology are Samsung and Hynix and both companies have been asked by the US to not ship to China. How they respond will be key for Micron.
“Both the South Korean companies will now be closely watched to see how they behave in the face of the US request as they have manufacturing factories in China whereas Micron does not. The companies may now need to navigate what could be politically treacherous waters.”
