China chip shares rally after Beijing mentioned US chip massive Micron is ‘primary safety possibility’

China’s chip shares rallied on Monday morning following Beijing’s announcement to bar some purchases of goods from US reminiscence chipmaker Micron,

China’s Cyberspace Administration barred operators of “critical information infrastructure” in China from purchasing merchandise from the USA chip massive following a safety evaluation performed via the Cyberspace Administration of China,

Chinese government mentioned Micron merchandise have failed its community safety evaluation, and cited “serious potential network security issues.” The company poses a “major security risk” to China’s important knowledge infrastructure provide chain and impacts [its] safety nationwide,” a remark mentioned.

Shares of Chinese chipmakers in large part rose on Monday following the transfer: Hong Kong-listed Hua Hong Semiconductor rose up to 3.14% on Monday, whilst SMIC rose 2.64%.

Other reminiscence chip manufacturers in mainland China similar to GigaDevice Semiconductor and Ingenic semiconductor jumped 3.74% and eight.08% respectively.

In reaction to Beijing’s announcement, the USA Commerce Department’s spokesperson mentioned, “We firmly oppose restrictions that have no basis in fact.” The division will have interaction with the Chinese executive to “detail” its place and search additional readability, they added.

The spokesperson added that the USA will have interaction with its key allies to handle Beijing’s movements, and that such measures will purpose “distortions of the memory chip market.”

This comes as the USA reportedly instructed South Korean chipmakers to not fill the shortfalls in China if Beijing’s ban comes into impact, the Financial Times reported,

Shares of South Korean chipmakers SK Hynix and Samsung Electronics, each Micron competitors, rose on Monday morning.

Correction: This tale has been up to date to replicate attribution to the USA Department of Commerce spokesperson.