Shares in data storage group Micron Technology (MU) were lower today on reports that it was ending chip supplies to data centers in China.
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Ban Blues
It is understood that the decision follows a failure to recover from the 2023 Chinese government ban on its products in critical Chinese infrastructure.
Micron was the first U.S. chipmaker to be targeted by Beijing – a move that was seen as retaliatory for a series of curbs by Washington aimed at impeding tech progress by China’s semiconductor industry.
It is believed, according to a Reuters report, that Micron will continue to sell to two Chinese customers that have significant data center operations outside China, one of which is laptop maker Lenovo (LNVGY).
Micron, which made $3.4 billion or 12% of its total revenue from mainland China in its last business year, will also continue to sell chips to auto and mobile phone sector customers in China.
Global Growth
Micron said in a statement that the division had been impacted by the ban, and it abides by applicable regulations where it does business.
Both Nvidia (NVDA) and Intel (INTC) have also fielded accusations from Chinese authorities and an industry group of their products posing as security risks, though there has not been any regulatory action.
The decision comes during a heightened period of tension between China and the U.S., both over tariff trade disputes and the race to be the leader of the AI revolution.
Losing out on revenue from such a huge market as China as it speeds up its AI adoption will be a blow, but there’s plenty of demand to go around it seems.
Micron recently reported an all-time high annual revenue of $37.38 billion and net income of $8.54 billion, driven by surging demand for advanced memory solutions in AI and data center markets.
Is MU a Good Stock to Buy Now?
On TipRanks, MU has a Strong Buy consensus based on 26 Buy and 3 Hold ratings. Its highest price target is $270. MU stock’s consensus price target is $211.85, implying a 4.60% upside.
