China imposes sales restrictions on Micron as it escalates tech battle with Washington

China has banned US chip maker Micron from selling to Chinese companies working on key infrastructure projects, in a major escalation of an ongoing battle between the world's top two economies over access to crucial technology.

The Cyberspace Administration of China (CAC) announced the decision on Sunday, saying the US chip maker had failed to pass a cybersecurity review. The news came shortly after the close of the Group of Seven (G7) summit in Hiroshima, Japan, where leaders of major democracies spoke in one voice on their growing concerns over China.

"The review found that Micron's products have relatively serious cybersecurity risks, which pose significant security risks to China's critical information infrastructure supply chain and would affect national security," the Chinese regulator said in a statement.

As a result, operators involved in domestic critical information infrastructure projects should stop purchasing products from Micron, it said.

Shares of Micron Technology (MU) sank about 3% Monday. Its Asian rivals had finished the day higher. Shares of Chinese memory chip maker Ingenic Semiconductor jumped 2.8%. Shenzhen Techwinsemi Technology surged 6.3%. Toyou Feiji Electronics soared 14%. In Seoul, SK Hynix, one of the world's largest memory chip makers, gained 0.9%, outperforming the South Korean market.

The Chinese regulator's decision came seven weeks after it kicked off a cybersecurity review of Micron's products, in apparent retaliation against sanctions imposed by Washington and its allies on China's chip sector.

Micron is one of the largest memory chip makers in the United States. It derives more than 10% of its revenue from mainland China.