Micron Pulls Back From China Server Market Following 2023 Ban Fallout

Micron Technology (NASDAQ: MU) shares declined ~4% on Friday after Reuters reported the company will halt server chip sales to Chinese data centers, marking another escalation in the ongoing U.S.–China technology rift.

The move follows Micron’s prolonged business slump after Beijing banned its products from use in critical infrastructure in 2023 — a decision widely viewed as retaliation for U.S. export controls on advanced semiconductors.

Scope of the Decision

Micron will reportedly continue supplying chips to:

Two Chinese customers with major data center operations outside mainland China, including Lenovo (OTCPK: LNVGY).

Clients in automotive and mobile device sectors, where regulatory scrutiny is lower.

China remains a key market for Micron, accounting for roughly $3.4 billion, or 12% of total revenue, in its last fiscal year.

Industry and Geopolitical Context

Micron’s move underscores the fragility of U.S.–China semiconductor relations, as both countries pursue self-sufficiency in AI and memory technologies.

While Nvidia, AMD, and Intel continue lobbying for export flexibility, Micron’s exit from the server segment highlights mounting uncertainty for Western chipmakers operating in China.

Analysts said the decision could accelerate Micron’s shift toward AI memory and HBM3E development, while trimming exposure to geopolitical risk.