Micron Technology Inc. (NASDAQ:MU) shares fell 3.84% in pre-market trading on Friday after a report emerged that the U.S. chipmaker will withdraw from China's data center market, ending a difficult chapter marked by Beijing's 2023 ban on its products in critical infrastructure.
Micron Pulls Out Of China Data Center Market After Ban
Micron, the first American chipmaker targeted by Beijing in 2023, decided to halt server chip sales to Chinese data centers after its business there failed to recover from the ban, reported Reuters, citing two people briefed on the decision.
The company will continue supplying chips to two Chinese customers with data center operations abroad, including Lenovo Group Ltd. (OTC:LNVGY).
It will also maintain sales to China's automotive and smartphone industries, which remain significant sources of revenue, the report noted, citing one source.
Micron derived $3.4 billion — about 12% of its total revenue — from mainland China last year.
In a statement to the publication, Micron said its data center division had been impacted by the Chinese government's restrictions and that it continues to comply with all applicable regulations.
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US–China Tech Rivalry Intensifies
The ban, widely seen as retaliation for Washington's export curbs on advanced chips, has pushed China to accelerate domestic semiconductor development.
Rival firms such as Samsung Electronics Co. (OTC:SSNLF) and SK Hynix Inc. have since captured Micron's lost market share, aided by local players like YMTC and CXMT, which are supported by Beijing.
Data center investment in China surged ninefold last year to 24.7 billion yuan ($3.4 billion), according to government procurement records reviewed by the publication.
Broader Crackdown On US Chipmakers
Micron's exit follows reports that China has intensified customs inspections on Nvidia Corp.'s (NASDAQ:NVDA) AI chips and other advanced semiconductors to curb smuggling and enforce regulatory guidance.
The crackdown comes as both nations deepen export and import restrictions, extending the semiconductor standoff that began in 2018 under President Donald Trump.
Price Action: According to Benzinga Pro, Micron shares were down 3.3% in overnight trade following a 5.5% increase on Thursday.
Benzinga’s Edge Stock Rankings place Micron in the 95th percentile for Growth and 94th for Momentum. Click here to see how it compares to Nvidia and other rivals.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
