Micron Reveals China Regulatory Probe Amid U.S. Trade Tensions
(Bloomberg) -- Micron Technology Inc., the largest U.S. maker of computer memory chips, said Chinese regulatory authority representatives visited its offices in that country, potentially opening another front in a growing trade dispute between the world’s two largest economies.
“Micron confirms that China’s State Administration for Market Regulation authorities visited Micron’s China sales offices on May 31 seeking certain information,” the Boise, Idaho-based company said in an emailed statement Friday. “Micron is cooperating with Chinese officials.”
China is the largest maker for semiconductors yet isn’t home to even one of the top 10 producers of the crucial electronic components. The memory chip market has been increasingly concentrated in the hands of Micron and its two Korean rivals, Samsung Electronics Co. and SK Hynix Inc. who have enjoyed record profits from the devices that are essential to everything from supercomputers to smartphones over the last year.
Chinese media reported that Samsung and SK Hynix also received visits from local regulators seeking information. Neither Korean company responded to requests for confirmation and comment. Local media reported that visits may have been sparked by concern about continued price increases for memory chips.
Micron shares were up 1.3 percent, to $58.35 at 12:40 p.m. in New York.
Micron got about half of its sales from China last year, according to data compiled by Bloomberg. China has been spending heavily on attempts to boost its domestic supply of semiconductors and lessen a bill that has exceeded the cost of oil imports.
China and the U.S. are caught up in negotiations over the fate of ZTE Corp., China’s second-largest telecommunications equipment maker. The company has been banned from vital purchases of American technology after being caught violating sanctions against sales to Iran.
The moratorium has all but shuttered ZTE because it depends on U.S. components -- such as Qualcomm Inc. chips -- to build its smartphones. Meanwhile San Diego-based Qualcomm, the world’s largest maker of phone chips, is waiting for approval of its acquisition of NXP Semiconductors NV from Chinese regulators. The deal was scheduled to be closed by the end of 2017.
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