The US-funded company fired the first shot in its technology war against China, and now its products are subject to security reviews

A short message caught my attention, and it was bombshell news based on the principle that fewer words are bigger things.

"Netinfo China" reported on March 31 that in order to ensure the security of the critical information infrastructure supply chain, prevent network security risks caused by hidden dangers of product problems, and maintain national security, in accordance with the National Security Law of the People's Republic of China and the Cybersecurity Law of the People's Republic of China, the Cybersecurity Review Office conducted a cybersecurity review of Micron's products sold in China in accordance with the Cybersecurity Review Measures.

Combined with the current background, Apple CEO, ASMAIL president, Qualcomm CEO and many other well-known high-tech enterprise leaders visited China. China said it continues to welcome business people from all walks of life to do business in China and share prosperity. The more the United States wants to decouple and break the chain, the more we choose to open up and win-win.

At this time, the implementation of a cybersecurity review of Micron's products obviously cannot be a retaliatory action against the United States. There is reason to believe that Micron's products really have safety problems. Of course, this will have to wait for the outcome of the review.

However, as far as Micron itself is concerned, its cybersecurity review is not unfounded. Micron can be called the vanguard of the US science and technology war against China.

Jinhua incident

We know that Huawei was suppressed by the United States, and even Meng Wanzhou was detained by Canada, but also fought hard and did not admit guilt in humiliation, showing Chinese indomitable spirit.

Before Huawei, the first to be included in the entity list by the US Department of Commerce was ZTE, and the other was Fujian Jinhua.

ZTE, like Huawei, is a well-known supplier of communication equipment, which will not be repeated here. Fujian Jinhua, on the other hand, is a newly created domestic DRAM chip provider, which competes with Micron in terms of products.

Let's briefly talk about an entanglement between Fujian Jinhua and Micron, and see how Micron suppressed the newly established technology company in the mainland.

Fujian Jinhua was established in 2016, jointly funded by Fujian Electronics Information Group, Quanzhou Financial Holding Group Co., Ltd., Fujian Jinjiang Industrial Development and Investment Group Co., Ltd., and carried out technical cooperation with Taiwan UMC.

Fujian Jinhua invested 300 million US dollars to purchase R&D equipment, and paid 400 million US dollars of technology research and development expenses of Taiwan UMC Electronics, and the DRAM technology achievements developed were shared by both parties and transferred to Fujian Jinhua mass production.

That is to say, Fujian Jinhua is funded, and UMC is responsible for research and development and sharing of technical achievements, which is completely a normal technical cooperation project.

Fujian Jinhua just started to build a factory in the second half of 2016, and in 2017, Chen Zhengkun, senior deputy general manager of UMC, just became the general manager of Jinhua Group. When Ambition was ready to go big, Micron stepped in.

Micron filed a lawsuit with the Taichung Court in Taiwan Province against employees who jumped from Micron to UMC for stealing DRAM trade secrets and leaking them to UMC.

UMC told Jinhua that it did not know about it, and assured that the technology received by Jinhua was clean and had nothing to do with Micron.

Soon after, Micron sued Fujian Jinhua and UMC in California federal court, claiming that UMC stole the intellectual property rights of its memory chips, including the key technology of memory chips, and handed them over to Fujian Jinhua.

The U.S. Department of Commerce added Fujian Jinhua to the export control list, declaring: "Fujian Jinhua is about to increase the large production capacity of DRAM." These impending increases in production capacity, likely based on U.S. technology, threaten the long-term economic viability of basic suppliers of U.S. military systems."

Originally, UMC said that the cooperation with Jinhua would continue, and then a day later, UMC suspended all cooperation, withdrew its technical backbone, and terminated the DRAM development plan with Fujian Jinhua. At the same time, European and American semiconductor equipment manufacturers have also withdrawn employees who provide technical support to Jinhua.

The end result is that Jinhua is still on the "entity list" of the United States, and UMC and Micron have long since reconciled. At that time, the initiator of UMC, 3 employees, only obtained a misdemeanor such as acquittal, 1 year probation, and 6 months probation.

If this is a successful sniper attack by Micron and the US Department of Commerce against Chinese technology companies, it can definitely be called a full harvest.

2 The darling of the government

Despite Micron's poor performance, it did not delay it from becoming the darling of the US government. To say that the US government's favorite technology company at present, if Micron says that it is the second, it is estimated that no one dares to claim the first.

In October last year, the official website of the White House specially published Biden's congratulatory speech for Micron Technology's investment in New York. Intel, the first to invest, and TSMC, which was forced to take sides, failed to win this award.

At Biden's State of the Union address on February 7 this year, Micron Technology's first employee in New York State, veteran Pollard, had the honor to attend the meeting as a guest with Senate Majority Leader and New York State Congressman Schumer.

What's more, Micron also received the highest single U.S. government subsidy for a project in nearly a decade, with New York State providing Micron with $5.5 billion in incentives, the second-highest ever, behind Boeing's $8.7 billion in subsidies in Western Australia.

3 Smear China

According to the latest fiscal year report, revenue in China in the latest fiscal year was US$3.3 billion, up 34.8% year-on-year. Micron has made huge profits in China, but it has been constantly withdrawing from China and smearing China.

At the beginning of last year, Micron took the lead in shutting down the DRAM design center in Shanghai, and hinted through the media that the closure of the design center was related to "protecting intellectual property rights", and intellectual property rights are obviously the most favorable excuse and weapon for the United States to attack Chinese companies.

In recent years' earnings announcements, Micron has consistently disregarded the facts and listed the Chinese government as the highest risk to its operations. While enjoying a huge US subsidy of US$5.5 billion, the policy of attacking China's investment in the storage industry stifles competition, which is a model of double standards;

It can be said that eating and smashing pots has done the ultimate. Despite the decline in Micron's performance and the rare growth of China's income, Micron still did not delay Micron's response to the call of the US government to continue to leave China and smear China.

4 Eat and smash the pot

After continuous layoffs and withdrawals, Micron basically has no assets in China, but it has not delayed making money in China.

The way to do this is to use the power of the U.S. government to eliminate China's competitors. The Jinhua incident can only be regarded as a small test for Micron.

On January 5, 2023, U.S. President Joe Biden signed into law the Protect U.S. Intellectual Property Act of 2022, which grants the President the authority to impose economic sanctions on foreign entities and individuals he deems to steal U.S. trade secrets in the field of intellectual property. Moreover, the scope of application of the bill is extremely broad, and many of the terms "stealing", "significant" and "benefiting" in the bill are not clearly defined, relying entirely on the discretion of the president.

Once identified, companies face at least five sanctions, including adding to the Entity List, freezing assets, export bans, banning loans from U.S. and international financial institutions, procurement sanctions, and banning banking transactions.

The bill was first introduced by Micron's heavily lobbied Senate and approved on the eve of the establishment of the China Committee. The bill's intentions against China are clear, and Micron can also use the bill to target the Chinese storage industry. Moreover, on September 29, 2022, the Senate also introduced the Defending Memory Chip Supply Chains from the Chinese Communist Party Act, which clearly proposes tougher sanctions on Yangtze River Storage and Chinese companies capable of producing 128 layers of NAND. At present, the bill has not been formally passed.

For Micron, passing these bills could wipe out Chinese competitors. In this way, even if it completely withdraws from China, Micron will not lose the Chinese market.

With a monopolistic competition market and increasing market concentration, Micron Technology has the means to master the market and continuously extract profits from the Chinese market to support its huge investment in the United States. Smashing the Chinese pot did not delay Micron from eating Chinese rice.

5 How to respond

Although Micron takes subsidies from the United States and grabs huge profits from China, its behavior is not a business after all. For business, it is a win-win cooperation. Miko's path is obviously crooked.

Although we were tolerant of what they did because we had a certain dependence on it at the beginning, what should come will come after all.

Now that Yangtze River Storage has achieved technological breakthroughs, there is no need to tolerate companies engaged in political speculation. We must protect the Yangtze River storage. Without Yangtze Storage, Micron and other companies would have stepped up. It must not be allowed to succeed in its purpose of suppressing mainland storage enterprises.

The latest news is that Micron has just released its worst earnings report in history. News of a security review of its products in China sent a 4% short-term tumbling.