Micron to Exit China Server Chip Market After Government Ban
Micron Technology plans to end its supply of server chips to data centers in China, following continued losses from a 2023 ban that restricted its products in critical infrastructure. According to two sources familiar with the matter, the U.S. chipmaker’s China server business never recovered after the restrictions.
Beijing’s Retaliation Against U.S. Tech Measures
Micron was the first American semiconductor company targeted by Beijing, a move widely viewed as retaliation against Washington’s export controls that aimed to slow China’s tech progress. Since then, Nvidia and Intel have also faced scrutiny from Chinese regulators and industry groups over alleged security risks, though no official sanctions have been imposed.
Lenovo to Remain a Customer
Despite the exit, Micron will continue serving two major Chinese clients with large data center operations outside the mainland, including Lenovo. The company, which earned $3.4 billion — about 12% of its annual revenue — from mainland China, will still supply chips for the automotive and smartphone sectors.
When asked about the withdrawal, Micron told Reuters that its data center division had been affected by the ban and confirmed it operates in compliance with all applicable regulations. Lenovo has yet to comment on the development.
U.S.–China Tech Rivalry Deepens
Trade and technology tensions between the U.S. and China have escalated since 2018, when President Donald Trump began imposing tariffs on Chinese imports. That same year, Washington intensified pressure on Huawei, citing national security concerns — allegations that Huawei has denied.
While the U.S. has sanctioned hundreds of Chinese tech entities, Beijing has imposed far fewer measures, partly due to its heavy reliance on imported semiconductor technology.
Losing Ground in China’s AI Expansion
China’s ban on Micron’s server memory products has cost the company access to the world’s second-largest market for server components. As a result, Samsung Electronics, SK Hynix, and domestic Chinese players like YMTC and CXMT have gained market share, supported by strong government investment.
Data center spending in China soared ninefold to 24.7 billion yuan ($3.4 billion) last year, driven by the country’s artificial intelligence boom.
Still, Micron’s global outlook remains positive. Rising AI demand outside China has led to record quarterly revenue, offsetting losses from the Chinese market.
Job Impact and Future Outlook
Micron’s China data center division employs over 300 staff members, though it’s unclear how many will be affected by the withdrawal. The company has already downsized other Chinese operations, including layoffs in its flash storage division after halting global mobile NAND development.
Meanwhile, Micron continues to expand its chip packaging facility in Xi’an, reaffirming its long-term commitment to the Chinese semiconductor ecosystem.
“China remains an important market for Micron and the semiconductor industry as a whole,” the company said in its statement.
