Server manufacturers in China reportedly avoid ordering memory modules with Micron processors.

After Beijing partially banned the company's products, leading server manufacturers in China, including Inspur Group and Lenovo Group, instructed suppliers to halt shipments of modules containing Micron Technology chips, a supplier with knowledge of the matter said.

The source, who wished to remain anonymous in order to safeguard business ties with clients, claimed that DRAM chips, a commoditized component frequently supplied by Micron and Samsung Electronics, are utilized in memory modules for servers.

The person further stated that it will take some time for the suppliers to make technical adjustments for newly sourced alternatives.

Attempts to reach Lenovo and Inspur for comment were unsuccessful.

The delayed orders demonstrate the direct effect China's ban, which was announced on Sunday, has already had on the biggest memory chip manufacturer in the US.

One of Micron's main sources of revenue, the Chinese market is expected to contribute around 11% of the company's total sales of US$30.8 billion in 2022. The company anticipates low to high single-digit declines in total revenues as a result of the ban, which prevents Chinese operators of essential information infrastructure from purchasing its goods.

According to statistics from Bloomberg, Inspur and Lenovo are two of the major buyers of Micron products. Inspur is subject to US trade sanctions.

Manufacturers of memory modules and third-party suppliers are also impacted by the restriction.

According to Huang Leping, an analyst at Huatai Securities, the Micron restriction would force Chinese memory module producers to alter their product lineups, according to an article published on Monday by Chinese magazine Caijing.

Between 2018 and mid-2021, Shenzhen Longsys Electronics, one of China's largest memory module manufacturers, ranked Micron as its top supplier, with annual purchases from the Boise, Idaho-based company reaching 33% of all procurement contracts.

In order to "safeguard key information infrastructure supply chain security" and "prevent cyberspace security risks due to problematic products," the Cyberspace Administration of China (CAC) initiated a national security investigation into Micron devices in March.

It was considered as revenge for Washington's tighter export curbs on advanced US semiconductor technology to China and represented the first time a foreign semiconductor company had been subject to a cybersecurity examination.

The CAC withheld information about the products it tested or the procedures it employed.

The Micron ban and recent Chinese authorities' raids on foreign consulting businesses, according to the US Commerce Department, are in direct opposition to the nation's commitment to an open market and clear regulatory structure.

At a routine press conference on Wednesday, spokesperson for the Chinese foreign ministry Mao Ning stated that the country's investigation into Micron was carried out in accordance with the law and that the most recent decision was founded on facts.

The evaluation "does not target any particular countries or regions, nor does China seek to exclude technologies or products from any specific country," the spokesperson continued.

By fLEXI tEAM