The export ban was put in place because Fujian Jinhua "poses a significant risk of becoming involved in activities that are contrary to the national security interests of the US", the Department said.
The Commerce Department said it's blocking sales of American components to Fujian Jinhua Integrated Circuit Company Ltd, recalling a similar ban that brought telecoms gear giant ZTE Corp to a virtual standstill. "The additional production, in light of the likely USA -origin technology, threatens the long-term economic viability of US suppliers of these essential components of US military systems".
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The order marks the second US action this year blocking technology exports to a Chinese buyer.
The Fujian-based DRAM maker is nearing completion of a vast $5.7bn wafer-manufacturing plant, which will help drive the Made in China 2025 strategy of self-reliance.
"At the point when a remote organization participates in action in opposition to our national security interests, we will make a solid move to ensure our national security", US Commerce Secretary Wilbur Ross said in an announcement.
The administration is concerned the Chinese firm could flood the market with cheap chips that are also made by USA companies that supply the US military.
Micron said it will follow the ruling while requesting the Fuzhou Court to reconsider or stay its decision.
Micron has accused Jinhua of stealing its intellectual property, something the Chinese firm denies.
In many ways the issue represents a microcosm of the overall US-China dispute, in that the former is belatedly reacting to years of state-sponsored IP theft by the latter.
Beijing has spent heavily to build up Jinhua and other chip makers as part of efforts to transform China into a global leader in robotics, artificial intelligence and other technology industries. Commerce Secretary Wilbur Ross noted that the State would ban US firms from exporting software and technology goods to the Chinese chipmaker. Such license applications will be reviewed but with a presumption of denial, the agency said.