Micron plans to stop supplying server chips to data centres in China after failing to recover from a 2023 government ban that targeted its products used in critical infrastructure, according to sources familiar with the decision. The U.S. chipmaker was the first major American semiconductor firm hit by Beijing in what was widely viewed as retaliation for Washington’s escalating technology restrictions. Shares of Micron slipped about 1% following the development, which marks a significant shift in its operations in the world’s second-largest economy.
Despite the pullback from China’s data centre segment, Micron will continue supplying chips to certain Chinese customers, including those with operations based outside the country, such as Lenovo. The company will also maintain chip sales to China’s automotive and mobile phone sectors, even though mainland China accounted for 12% of its revenue — about $3.4 billion — in its last financial year. Micron said the ban had heavily impacted its data centre division and reiterated its commitment to complying with regulations in every market where it operates.
The exit comes as U.S.-China tech tensions deepen, with Nvidia and Intel also facing accusations from Chinese authorities over alleged security risks. Analysts say Micron will now look to redirect its data centre business to other regions, including Asia, Europe and Latin America, where AI-driven demand is spurring rapid global expansion. The chipmaker believes it can offset losses in China by tapping into this growing market, which has already helped it post record quarterly revenue.
China’s ban has bolstered competitors such as Samsung, SK Hynix, and domestic firms like YMTC and CXMT, which are expanding aggressively with government backing. Although Micron has been downsizing some operations in China, including job cuts in its mobile storage programme, it continues to invest in areas such as chip packaging in Xian. The company maintains that China remains an important market, but for now, it will focus its data centre ambitions elsewhere due to regulatory barriers