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Investing.com-- Micron Technology (NASDAQ:MU) plans to stop supplying server chips to data centers in China after the business was slapped with a government ban in 2023, Reuters reported on Friday, citing two people briefed on the decision.
The company will continue to sell chips to two Chinese customers with large data center operations outside the country, one of which is PC maker Lenovo Group (HK:0992), Reuters reported.
Micron will also continue to sell chips to the automobile and mobile phone sectors in China, Reuters reported. China accounted for roughly 12% of Micron’s revenue in its prior financial year.
China in 2023 banned the use of Micron chips in “critical infrastructure,” a move then viewed as retaliation for Biden-era curbs on chips and artificial intelligence technology exports to the country.
Since then, NVIDIA Corporation (NASDAQ:NVDA) and Intel Corporation (NASDAQ:INTC) have also faced similar challenges from Chinese authorities, especially as Sino-U.S. trade relations deteriorated significantly under the Trump administration this year.
Earlier reports in October showed Chinese customs was cracking down on the import of U.S.-made chips, with Beijing seen promoting its “AI plus” strategy of self-reliance across the entire AI stack.
Server chips are an important component of AI development, given their use in the data centers that run advanced AI programs.
Micron lost out to rivals such as Samsung Electronics Co Ltd (KS:005930) and SK Hynix Inc (KS:000660) in catering to Chinese companies in recent years.
Still, the company clocked record-high revenue in its fiscal fourth quarter, as stellar server and memory chip demand outside China underpinned its earnings. Micron is among the world’s largest makers of server and memory chips, and has benefited greatly from an AI-fueled surge in chip demand.