Micron Technology (MU) is set to halt its supply of server chips to data centers in China following an unsuccessful recovery from Beijing’s 2023 product ban. The chipmaker announced on October 17 that it will exit this specific market segment, marking a significant shift in its operations amid ongoing trade tensions between the U.S. and China.
### Background: The Beijing Product Ban and Its Impact
Micron was the first American semiconductor company to face pressure from Chinese authorities when Beijing imposed a product ban in 2023. This ban was widely viewed as a retaliatory move in response to Washington’s restrictions targeting China’s tech industry growth. Despite China’s rapidly expanding data center market, Micron was effectively shut out, unable to capture any market share in this lucrative sector.
### Selective Market Approach in China
Although Micron is pulling back from supplying server chips to Chinese data centers, it isn’t completely leaving the Chinese market. The company will continue to sell chips to Chinese customers that have substantial operations outside of China. Additionally, Micron plans to maintain its presence in China’s automotive and mobile phone sectors, which remain open for business.
This selective strategy enables Micron to balance continued market access with the realities of government-imposed restrictions, maintaining a foothold in the world’s second-largest economy despite the challenges.
### CEO Sanjay Mehrotra’s Recent Stock Activity
Amid these strategic shifts, Micron’s CEO Sanjay Mehrotra has been active in the stock market. In late October, he sold company shares valued at approximately $5.13 million. These transactions, spanning October 29 and 30, involved the sale of 18,586 shares with prices ranging from $221.68 to $231.45 per share.
– On October 29, Mehrotra sold 8,968 shares at an average price of $230.23 and 2,930 shares at $231.45.
– On October 30, he sold multiple lots at slightly lower prices: 527 shares at $221.68, 596 shares at $223.04, 1,131 shares at $224.30, 3,225 shares at $225.05, 4,911 shares at $226.14, and 212 shares at $226.79.
These sales were conducted under a Rule 10b5-1 trading plan, which Mehrotra established on August 8, 2024. This plan allows executives to sell shares on a predetermined schedule to avoid any appearance of insider trading.
Additionally, on October 29, Mehrotra gifted 10,000 shares. After these transactions, he directly owns 409,078 shares and holds an indirect ownership of 675,000 shares through grantor retained annuity trusts for himself and his family.
### Conclusion
Micron Technology’s decision to stop supplying server chips to Chinese data centers reflects the ongoing challenges posed by geopolitical tensions and regulatory barriers. However, by focusing on automotive, mobile phone sectors, and customers with operations outside mainland China, Micron aims to sustain a strategic presence in the Chinese market.
Meanwhile, CEO Sanjay Mehrotra’s stock transactions underscore the company’s ongoing corporate maneuvers as it navigates this complex business environment.
https://blockonomi.com/micron-mu-stock-company-abandons-chinese-data-center-fight-after-ban/