Micron case causing concern for US companies in China, business chamber says

SHANGHAI (Reuters) – Leaders from a top U.S. business lobbying group said on Wednesday that Beijing’s probe against U.S.-based chipmaker Micron Technology Inc (NASDAQ:) marked a “major concern” for other companies operating in the country.

In the absence of data or “real evidence showing that Micron’s products provided or stood as an example of a particular vulnerability to China,” the probe suggests other companies or industries could be singled by Beijing based on unclear suspicions, said Lester Ross, chair of the policy committee at the American Chamber of Commerce in China (AmCham China).

“It is a major concern because China lacks transparency in many conventions of law and policy, and this is one,” Ross said.

Late in March, China’s cyberspace regulator said it would conduct a cybersecurity review of products sold by Micron Technology to “prevent hidden risks and safeguard national security.”

Ross’ comments came during a media roundtable after the release of the Beijing-based chamber’s survey on business sentiment, which collected responses from 109 American companies operating in China over the period of April 18-20 of this year.

The survey results showed respondents were more optimistic about the business outlook in China compared to the previous survey conducted in late 2022, before the government lifted COVID-19 controls.

However, more companies are concerned that worsening U.S.-China relations will affect operations. About 87% of respondents stated they were at least slightly pessimistic about the two countries’ bilateral relationship, up 14 percentage points from the previous poll.

Michael Hart, president of AmCham China, said the survey showed that American companies feel the overall environment for investment in China is becoming less predictable than before.

Micron has said it would cooperate with the probe and that its shipments and operations in China remain unaffected. The review comes amid a wave of export restrictions from Washington in 2022 that targeted China’s chip sector.