Micron (MU) drops as China launches cybersecurity review of its products

March 31, 2023 8:55 AM EDT

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Shares of Micron Technology (NASDAQ: MU) are trading more than 3% lower in pre-market Friday after China’s Cyberspace Administration announced today it will initiate a cybersecurity review of the company’s products that are being sold in China.

The review is launched to “ensure the security of the key information infrastructure supply chain, prevent network security risks caused by hidden product problems, and maintain national security,” it is said in the translated statement from the Cyberspace Administration of China.

Such actions are implemented under the "National Security Law of the People's Republic of China" and "Network Security Law of the People's Republic of China", and by following the "Network Security Review Measures," the regulator further stated.

Micron said last year it seeks to close its DRAM design operations in Shanghai and relocate to U.S. or India. In 2021, the chipmaker said it is concerned by the government-backed competition in China.

"We face the threat of increasing competition as a result of significant investment in the semiconductor industry by the Chinese government and various state-owned or affiliated entities that are intended to advance China's stated national policy objectives," Micron said in its 2021 report.

Shares were trading higher this week after the company reported better-than-feared results.

By Senad Karaahmetovic

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Senad Karaahmetovic