Why Micron Tech Stock Is Trading Lower Monday

  • Micron Technology, Inc MU stock is trading lower Monday after China banned some of its product sales after a seven-week investigation into Micron.
  • The Cyberspace Administration of China flagged serious cybersecurity issues posed by Micron products and potential risk to the country's key information supply chains, Financial Times reports.
  • The regulator urged domestic firms that provide "key information infrastructure" to stop buying from Micron.
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  • Mainland China and Hong Kong accounted for 25% of Micron's $30.8 billion in revenue in 2022.
  • Last October, Washington introduced expansive chip export controls, and the Netherlands and Japan have since followed. 
  • The U.S. also prohibited Nvidia Corp NVDA from exporting H100, its state-of-the-art GPU for generative AI training, to China.
  • Analysts said Micron is an obvious first target for Beijing as competitors' chips from South Korean rivals Samsung Electronics Co, Ltd SSNLF and SK Hynix could easily replace the former. 
  • In April, the White House asked South Korea to urge its chipmakers not to fill any market gap in China if they restricted Micron products.
  • Beijing's ruling follows the G7's stark denunciation of China during the annual meeting of global leaders in Hiroshima.
  • Analysts warned against a domino effect from Chinese companies that did not provide "critical information infrastructure" to seek to eliminate Micron from their supply chains.
  • Price Action: MU shares traded lower by 4.77% at $64.92 premarket on the last check Monday.
  • Photo via Wikimedia Commons
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