Micron Technology Inc (NASDAQ: MU) lost about 3.0% on Monday after China told its companies engaged with critical information systems to no longer buy chips from the Boise-headquartered firm.
Micron to take a $3.0 billion hit
Its Cyberspace Administration cited a significant security threat as it announced the ban.
Today’s development marks the most meaningful retaliation we’ve seen from China so far against the U.S. efforts to block its access to advanced semiconductor technology. Reacting to the news, famed investor Jim Cramer said:
They have a lot of business in China. It’s 14% of their business. It’ll be a hit of about $3.0 billion. For a company that has $23 billion in revenues, it’s not insignificant. So, I do expect the stock to trade down.
Versus the start of this, Micron shares are still up 30% at writing.
AMD could be the next on China’s list
The Nasdaq-listed firm is scheduled to report its third quarter financial results late next month. Consensus is for it to lose $1.71 a share versus $2.5 per share of earnings a year ago.
Interestingly, Cramer doesn’t expect the retaliation from China to be restricted to Micron Technology. On CNBC’s “Squawk on the Street”, he added:
This is just the beginning unless there’s more amenable situation between [the U.S.] and President Xi. AMD is levered there. Next would be AMD. I don’t think AMD will have any better relations.
Interestingly, though, shares of Advanced Micro Devices Inc (NASDAQ: AMD) are keeping in the green on Monday.
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