On October 18th， according to Reuters， citing two insider sources， U.S. memory chip giant Micron plans to cease supplying server chips to Chinese data centers. This decision stems from its inability to recover from the Chinese government’s ban on its products in critical infrastructure within China， which was enacted in 2023.
The informed sources emphasized that Micron Technology will continue to supply products to two Chinese customers who have significant data center operations outside of China， one of which is laptop manufacturer Lenovo.
Furthermore， Micron Technology will continue to supply chips to customers in industries not related to infrastructure， such as mobile phones and automotive sectors in China.
This development signifies Micron’s formal withdrawal from the Chinese data center market. Analyzing this move， it’s evident that the geopolitical context and national security concerns in China have directly impacted Micron’s market strategy. The ban， originating from the Cyberspace Administration of China (CAC)， has forced a strategic re-evaluation by the company.
In response to reports of withdrawing from the Chinese data center business， Micron Technology stated in a release that this segment was affected by the Chinese ban and that the company adheres to applicable regulations in the regions where it operates. This statement highlights Micron’s acknowledgment of regulatory challenges while affirming its commitment to compliance.
Records indicate that on May 21， 2023， the Cyberspace Administration of China announced its conclusion that Micron products did not pass the cybersecurity review. The subsequent requirement for operators of critical information infrastructure to cease procurement had a negative impact on Micron’s business operations in China. This regulatory decision marked a significant turning point， directly addressing the perceived security risks associated with U.S. technology in China’s sensitive infrastructure sectors.
In a subsequent article published by Micron， the company addressed China’s restrictions on its storage products， noting that “Revenue from companies headquartered in mainland China and Hong Kong， including direct sales and indirect sales through distributors， accounted for approximately one-quarter of Micron’s global revenue， representing a significant exposure. We now believe that roughly half of our China customer revenue (equivalent to a low single-digit percentage of Micron’s global revenue) is now at risk of being impacted.” This disclosure underscored the substantial financial implications of China’s market access limitations for Micron and served as a clear indicator of the dual pressures of regulatory action and market reality.
On June 16， 2023， Micron announced plans to invest over 4.3 billion RMB in its assembly and test factory in Xi’an， China， over the next few years to upgrade and expand its production lines. This move was widely interpreted as Micron’s proactive attempt to signal goodwill towards China. At a time when its core business in critical infrastructure was facing severe restrictions， these investments aimed to demonstrate continued commitment to its Chinese operations and workforce， potentially seeking to mitigate the broader negative impacts of the ban.
On December 24， 2023， Micron announced a global settlement agreement with Fujian Jinhua Integrated Circuit Co.， Ltd.， whereby both companies would withdraw all lawsuits against each other in exchange for global litigation termination. This action was also seen as an effort by Micron to further improve its relationship with China. The resolution of the protracted legal dispute with Jinhua was crucial for Micron to clear potential obstacles and create a more stable operating environment in China， at least in areas not directly affected by the infrastructure ban.
On March 27， 2024， Micron announced the groundbreaking ceremony for its new assembly and test facility in Xi’an， further reinforcing its unwavering commitment to its operations， customers， and community in China. The new facility is anticipated to commence production in the second half of 2025， with gradual output increases based on market demand. Upon completion， the total area of Micron’s Xi’an facility will exceed 132，000 square meters (1.4 million square feet). This significant investment in expanding its manufacturing footprint in China， even amidst market uncertainties， suggests a strategic calculation by Micron to maintain a strong presence in the broader Chinese market while navigating the specific challenges in the data center sector.
At the time， Micron President and CEO Sanjay Mehrotra stated， “The groundbreaking for our new facility today is an important step in Micron’s global assembly and test strategy， showcasing our unwavering commitment to our customers， operations， and team members in China. Micron has a deep honor in building close collaborations with our customers over more than 20 years in China. Micron’s additional investment in Xi’an will further empower our customers in their development and innovation across multiple sectors.” This statement reflected a dual commitment: to the Chinese market at large and to strengthening its local capabilities. However， the specific context of the infrastructure ban loomed large， casting a shadow over the extent to which these promises could be fully realized in all market segments.
Despite Micron’s increased investment in its Chinese operations， China’s ban on procuring Micron storage chips for its infrastructure sector remained in effect. This highlights the persistent tension between Micron’s desire to maintain and expand its presence in China and the Chinese government’s strategic priorities regarding national cybersecurity and technological self-reliance. The ban effectively segmented the Chinese market， forcing Micron to focus on non-infrastructure sectors.
According to Micron’s financial reports， its sales from mainland China as a percentage of total revenue have declined in recent years， from 14.03% in fiscal year 2023 to 12.1% in fiscal year 2024， lagging far behind the United States’ 52.4% and Taiwan China’s 18.7%. The latest disclosed financial report for fiscal year 2025， ending August 28， 2025， indicates that the revenue contribution from mainland China to Micron has further decreased to approximately 7.1%. This steep decline in revenue share from mainland China illustrates the tangible and escalating financial impact of the market access restrictions.
In this latest financial report， Micron also pointed out that the CAC’s May 2023 decision preventing Chinese critical information infrastructure operators from purchasing Micron products has adversely affected its competitive capabilities both in China and elsewhere. This directly attributes the decline in their China revenue to the regulatory action.
Micron explained that this has affected its revenue from companies headquartered in mainland China and Hong Kong， including direct sales and indirect sales through distributors. This continues to have a negative impact on Micron’s business in China， causing these customers’ demand to shift to other competitors. Concurrently， government-supported domestic competitors also pose a threat of intensified competition and oversupply in its business in the Chinese market. The interplay between regulatory pressure and domestic competition appears to be a significant challenge sector for Micron.
Micron emphasized that the CAC’s decision has impacted its business， particularly in the data center and network markets within China， and that the company has been working to mitigate this impact. This ongoing effort to mitigate the effects of the ban underscores the strategic importance of the Chinese market for Micron， even as it faces significant headwinds.
