China took time to reflect, but six months after the broadest US sanctions against the Chinese semiconductor industry, it retaliated, launching an investigation into US memory card company Micron Technology. The action Micron, which achieves 11% of its turnover in China, has lost 7% on the Nasdaq since the announcement of this very political investigation, on March 31.
On Wednesday April 5, the Chinese Ministry of Commerce accused Japan of “bad practices”, following Japan’s alignment with US sanctions. Enough to fear further reprisals. By restricting the sale of 23 equipment necessary for the production of semiconductors to China, Japan joined the Netherlands, which had already prohibited its flagship ASML from selling its most advanced machines to China, under pressure from the UNITED STATES. At the beginning of March, the Chinese ambassador to the Netherlands had promised ” consequences “, if Amsterdam applied these export controls.
Until now, China had contented itself with a muted reaction: in October 2022, Beijing denounced the ” harassment “ of its companies which “violates the spirit of cooperation”. The Chinese Ministry of Commerce had also launched an action with the World Trade Organization, which, in the opinion of experts, has little chance of succeeding.
Awkward position
China finds itself in a delicate position: the world’s largest producer of electronic devices, semiconductors are its main import item, ahead of oil, with 432 billion electronic chips purchased in 2021. The United States has decided to exploit this vulnerability as much as possible to prevent the rise of the country, particularly in the military and surveillance fields. But to reduce this dependence, Chinese companies need access to components and machinery produced abroad: responding to these US sanctions risks fueling an escalation and depriving China of access to even more foreign technologies.
China took time to respond. The choice to target Micron owes nothing to chance: in December 2022, Washington had blacklisted around thirty companies in the electronic chip sector, including the Chinese memory card champion Yangtze Memory Technologies Corp (YMTC), a direct competitor. of Micron. A measure that deprives these companies access to any US components or software.
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