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China Chip Stocks Extend Gains as Beijing Probes Micron

Microon uncertainty amid US vs China relation on the semiconductor dominance emerges!

Chinese chip-related stocks advanced amid optimism that they will benefit from the nation’s growing self-reliance push after Beijing launched a probe into Micron Technology Inc.

Tweet on Micron probe by Beijing

Bloomberg Chart on Micron

Gains come amid declines in Asian chip stocks such as Samsung

The Micron probe is opening a new front in Bejing’s chip war with the US, which has been moving to prevent China from accessing advanced technology. Investors are betting local Chinese firms may benefit, with the nation’s memory-chip business considered relatively advanced and experienced, unlike the domestic logic subsector.

The Chinese government said in a statement Friday that it’s conducting a review of Micron to ensure the integrity of its information infrastructure supply chain, prevent network security risks and maintain national security. Shares of Micron, which counts on mainland China for about 11% of its sales, fell 4.4% in New York.

While Chinese chip stocks climbed Monday, peers elsewhere in Asia fell on the news. Among South Korean memory makers, SK Hynix Inc. dropped 2.3% while Samsung Electronics Co. slipped 1.6%.

Analysts including Citic Securities Co.’s Xu Tao said Micron’s Chinese clients will likely transfer orders to local suppliers. Some remain cautious, however, that the share gains in China’s chip sector may not be sustained in the long run.


Image: Micron