Micron shares on pace to extend losses after China unveils import review

Micron shares on pace to extend losses after China unveils import review
© Reuters.

By Scott Kanowsky 

Investing.com — Shares in Micron Technology (NASDAQ:) edged lower in premarket trading on Monday, extending losses seen in the final session of last week that were sparked by a decision from China to launch a review of imports from the U.S. memory-chip maker.

The Cyberspace Administration of China announced the review on Friday, arguing that it was necessary to protect the security of the country’s information infrastructure. Micron has said it would cooperate with any inquiry.

The move was viewed as the latest increase in tensions between Beijing and the U.S. over semiconductor technology.

Earlier this year, the Netherlands and Japan made a deal with the U.S. to restrict exports of advanced chips to China that could be used in devices with military applications. Before that, Washington set strict export controls on chip technology to China in October last year in a bid to curb its development of artificial intelligence and supercomputers.

In a note to clients, analysts at Morgan Stanley said Micron would feel a “limited” hit from the CAC’s investigation.

“We can’t really speculate as to the reason for the inquiry, and there shouldn’t be any near term impact, in our view. That said, it could actually be a potential positive, as any form of supply chain anxiety could prove helpful in a meaningfully oversupplied market,” the analysts said.

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