Following a G7 agreement to “de-risk, not decouple” from China, China announced a ban on U.S.-based Micron chips in certain sectors. The Sunday announcement marks the first targeted chipmaker ban by Beijing. Washington has attempted to slow Chinese military progress by limiting the export of chips and chipmaking technology for the past year.

Industry analysts predict these aggressive policies will negatively impact long-term investment and supply chain management, despite small benefits to Micron’s rivals Samsung and SK Hynix. Last week Micron announced an investment plan to bring advanced ultraviolet chipmaking technology to Japan. Micron did not comment on whether lost Chinese revenue will impact its Japanese investment plan. International restrictions impacting the chip industry make it harder for chipmakers to establish plans for manufacturing expansion. Constructing chip factories is highly capital-intensive, with Samsung’s two recent South Korea plants costing $45.5 billion. Analysts predict chips are the tip of an expanding U.S.-China hegemony war.

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https://www.reuters.com/technology/chinas-micron-ban-highlights-chipmakers-dilemma-sino-us-tensions-grow-2023-05-22/