Micron is building a new packaging and testing plant in China despite sales ban — largest American chipmaker expands abroad

Visiting Micron Fab 16
(Image credit: Future)

In May of last year, the Chinese government banned the sale of Micron chips for government applications, citing unspecified cybersecurity concerns. Fast-forward to 2024, and Micron has announced the grand opening ceremony for a new Chinese chip packaging and testing plant — even though the aforementioned ban has not been lifted.

Amid the ongoing China-U.S. Chip War, China officially banned the sale of Micron chips due to cybersecurity threats supposedly posed by Micron chips. Chinese authorities never provided any compelling evidence of actual misuse, however, leading to the widely held belief that the ban was a retaliatory measure. U.S. trade restrictions placed on Chinese DRAM and NAND companies like YMTC and CXMT gave China more than enough incentive to retaliate, and the Micron ban seemed a primary example.

Despite the sales ban, China's Commerce Minister Wang Wentao still voices support for Micron's operations in China. "We welcome Micron Technology to continue to take root in the Chinese market," he said outright recently. He also clarified it was "under the premise of complying with Chinese laws and regulations."

While the official statements from China indicate that Micron is still allowed to operate within China, the company is doing so with a hand tied behind its back. How exactly Micron is meant to address China's concerns has never been stated, and chances are that will either never happen or will quickly resume once China decides that doing so is the best move.

As the United States' largest memory manufacturer, Micron operates in a very interesting position, geopolitically speaking — especially considering the CHIPS Act and its push for U.S.-first manufacturing.

Besides market positioning putting Micron in a strange spot between the U.S. and Chinese governments, the company is also being attacked by Chinese-owned YMTC in the courtroom over alleged patent infringement relating to 3D NAND technology. YMTC shooting for a U.S.-based court battle against Micron has also been speculated to represent the Chinese company trying to earn its way off the U.S. government's entity list. 

Or it could be just another retaliatory shot in the Chip War.

Overall, Micron's continued growth in the Chinese market shows that it's still perfectly willing to do business with China, even while China's largest domestic manufacturers and the government send aggressively mixed messages. If Micron were truly a national security threat to China, it seems unlikely they'd be allowed to construct a new semiconductor packaging and testing plant in one of China's largest cities.

The new plant is stated to be part of a roughly $602 million Micron plan to invest in the Chinese market. While Micron had a plant in Xi'an, China, as early as 2005, it has undergone three rounds of expansion. According to Micron's VP, the total investment in Xi'an has cost it 11 billion yuan, or roughly $1.5 billion, since '05. 

Overall, this move suggests Micron is motivated to make the most of its Chinese investments, potentially getting China to change its mind about the ban on Micron's memory ICs. Micron did not respond to our request for confirmation or comments.

  • hotaru251

    the Chinese government banned the sale of Micron chips for government applications, citing unspecified cybersecurity concerns

    Good thing the Chinese Gov isn't their primary focus then.

    The non gov entities are more profitable than the Gov given how many people actually live in China so makes sense they still want to make and sell stuff in the country.
    Reply
  • gg83
    I wonder if Micron didn't announce building this, Micron employees in China would get locked up for "espionage".
    Reply
  • vijosef
    The "confrontation" between capitalism and communism has always been a hoax, and western technology, capital and help, has always been passed under the carpet from the west towards communists.

    Antony Sutton revealed how Wall Street always financed the Soviet Union on his book "Wall Street and the Bolshevik Revolution".
    The british fabian socialists are behind it.
    Reply
  • Co BIY
    vijosef said:
    The "confrontation" between capitalism and communism has always been a hoax, and western technology, capital and help, has always been passed under the carpet from the west towards communists.

    Antony Sutton revealed how Wall Street always financed the Soviet Union on his book "Wall Street and the Bolshevik Revolution".
    The british fabian socialists are behind it.

    Not much communist about the CCP right now. Looks to me like Xi is keeping the Leninism while the Marxism has been tossed aside.
    Reply