By Alexander Lee 
 

On May 21, China announced that it would prohibit important information infrastructure operators from purchasing products from US memory semiconductor manufacturer Micron, claiming that Micron's products could "affect national security." A spokesperson for Micron said, "We are analyzing the results and will review the next steps. We will continue to consult with Chinese authorities." This image shows the company's automotive semiconductor factory in Manassas, Virginia. Manassas/AP United News
 
On May 21, China announced sudden sanctions against US semiconductor company Micron, marking the start of a full-scale strategic competition between the US and China in the field of advanced industries such as semiconductors. China made it clear that this measure was in retaliation against the United States by announcing the sanctions on the last day of the summit where the Group of Seven (G7) nations discussed a new approach towards China. The next day, China moved to keep in check the movements of South Korea, a powerhouse in memory semiconductors, placing the country in a difficult position between the strategic competition of the US and China.
The Cybersecurity Review Office (CAC) under the Chinese National Internet Information Office announced on its website at 8 PM that "Micron failed to pass the security review conducted based on the cybersecurity law, which found serious security problems." The order to stop purchasing the company's products was issued on the last day of the G7 summit, following the start of the review on March 31. This is the first time that China has conducted a safety review according to the cybersecurity law enacted in 2017 and imposed sanctions on a US semiconductor company.
The logic presented by China was that Micron's products could bring "significant safety risks to our country's important information infrastructure supply chain," which could ultimately "affect China's national security." In May 2019, the US Department of Commerce added Chinese company Huawei, a leader in fifth-generation telecommunications (5G), to the 'entity list' (blacklist), claiming that it could threaten the country's national security. Additionally, in October 2022, the US gathered allies including Japan and the Netherlands to prohibit the export of advanced semiconductors and semiconductor equipment to China, claiming that it could harm US national security. Now, China has taken retaliatory measures against the US using the same logic.
Furthermore, this measure can be interpreted as a rejection of the 'derisking' approach towards China proposed by the G7 countries on May 20. Jake Sullivan, US National Security Advisor, stated last month that the US is pursuing "derisking" rather than "decoupling" and that "our export regulations are very narrowly focused on technologies that can tilt the military balance." The G7 countries also stated in their joint declaration that "our approach is not to harm or frustrate China's economic progress or development, but to reduce excessive dependence on our key supply chains."
As China takes a full-scale retaliatory stance against the US, South Korea's concerns are deepening. Among US semiconductor companies, Qualcomm (64%), Intel (27%), and AMD (22%) have a high proportion of sales in China. However, China targeted Micron (10.8%, $3.31 billion), a memory semiconductor company. By avoiding companies that manufacture irreplaceable system semiconductors and targeting Micron, China has left Samsung and SK Hynix as strong 'alternative purchasers.' Last month, the Financial Times reported that the US government had asked South Korea not to sell semiconductors from Samsung and SK Hynix to China if China bans the sale of Micron semiconductors.

Chinese President Xi Jinping waves while taking a group photo at the China-Central Asia summit held in Xi'an, Shaanxi Province on the 19th. Xi'an/Reuters
China has strongly guarded against such moves by the US. At a regular briefing on May 22, Mao Ning, a spokesperson for the Chinese Ministry of Foreign Affairs, stated, "The US's actions are aimed at protecting its hegemonic interests by coercing other countries to restrict exports to China." He added that this "severely violates market economy principles and international economic and trade rules, and undermines the stability of the global industrial network and supply chain." He expressed strong opposition to such behavior and hoped that related countries and companies would work together with China to safeguard the multilateral trade system and the stability of the global industrial network and supply chain. This statement is interpreted as referring to South Korea and Samsung Electronics. If South Korea complies with the US's request, it will face retaliation from China, and if it refuses, it risks damaging its alliance with the US.
 
Reporter Alexander Lee alexanderlee_24@newsyn.co.kr