US chipmaker Micron is planning to stop supplying server chips to data centres in China after a 2023 Chinese government ban on its chips for critical infrastructure, Reuters reported.

Micron will continue to sell to two Chinese customers that have significant data centre operations outside of China, one of which is Lenovo, the report said, citing unnamed sources.

The company also reportedly plans to continue selling chips to automobile and mobile phone customers in China.

Data centre demand

Micron said in a statement that its data centre business had been affected by the ban and that it follows regulations in the jurisdictions where it does business.

“We have a strong operating and customer presence in China, and China remains an important market for Micron and the semiconductor industry in general,” the company stated.

The 2023 ban on Micron products in Chinese critical infrastructure was seen as retaliation for US curbs affecting Chinese companies.

While the company has missed out on a rapid data centre build-out in China due to AI demand, data centre growth in other countries has more than made up for the loss, fuelling record quarterly revenues.

Chinese regulators have since targeted other chipmakers, including Nvidia and Intel, for allegedly posing security risks, and, in the case of Nvidia, also allegedly breaking competition law.

Trade tensions

Regulators have not imposed outright product bans as with Micron, but have reportedly advised domestic companies not to use Nvidia AI chips over security concerns.

Nvidia chief executive Jensen Huang told a Citadel Securities event in New York earlier this month that as a result of US export controls and Chinese government pressure, its market share in the world’s second-largest economy has effectively fallen to zero.

Micron said in June it would invest $200 billion (£149bn) into manufacturing and research and development within the US, amidst a White House push to bring more high-tech manufacturing onshore.