October 17, 2025
Two sources familiar with the matter informed Reuters that the American memory chip giant Micron Technology has decided to cease supplying server chips to data centers in mainland China. This move comes amid increasing technological competition between China and the United States, as the company undergoes a major strategic pivot.
The decision was directly linked to the ban imposed by the Chinese authorities in 2023 citing “national security risks,” which led to Micron’s server chip business line struggling to recover. However, analysts point out that Micron is now capitalizing on the explosive demand for AI memory worldwide, actively shifting resources and focus away from the restricted Chinese market to diversify revenue risks.
While China is the world’s second-largest server memory market, Micron has seen significant growth in DRAM and High-Bandwidth Memory (HBM) due to the strong push for global data center expansion driven by AI demands. Recent quarterly revenues have even hit record highs.
Analysts from Emarketer noted that Micron is redirecting its business focus towards other markets in Asia, Europe, and Latin America, “betting on being able to make up for the lost business in other markets.”
The U.S. Department of Commerce has previously mentioned that Micron is the only domestic American advanced process memory chip manufacturer, with its DRAM technology widely used in artificial intelligence, high-performance computing, automotive, and next-generation wireless devices.
The CEO of Micron has stated that the company is in a unique position in the AI opportunity. This withdrawal allows Micron to focus more on collaborations with U.S. tech giants like Nvidia, AMD, further strengthening its core position in AI data center infrastructure.
Against the backdrop of escalating geopolitical competition between China and the U.S., the 2023 ban by the Chinese government on using Micron chips in “key infrastructure” was seen as Beijing’s retaliatory action against Washington’s restrictions on China’s access to advanced semiconductor technology.
Since President Trump began imposing tariffs on Chinese goods in his first term in 2018, the technological competition between China and the U.S. has only intensified. In the same year, the U.S. escalated accusations against Chinese tech company Huawei, claiming it posed a national security risk and imposed sanctions a year later.
Huawei has denied these allegations. Micron was the first U.S. chip manufacturer targeted by Beijing.
Since then, despite no regulatory actions taken, Nvidia and Intel’s chips have also faced security-related accusations from the Chinese authorities.
Before the 2023 Chinese investigation concluded, Micron had asserted that its products were secure. Nvidia and Intel have also denied allegations that their products pose national security risks to China. Currently, the U.S. has sanctioned hundreds of Chinese entities, while Beijing, which relies more on imported technology, has taken fewer regulatory actions.
With its mainland China business accounting for around 12% of total revenue in the last fiscal year, Micron has not completely severed ties with the Chinese market.
However, Micron has been scaling back its operations in other areas in China. According to reports from South China Morning Post, the company laid off hundreds of employees in its Universal Flash Storage (UFS) project in August.