Beijing has launched its first major counterstrike in its chip war with the U.S.

The blow is far from crippling, but U.S. companies in high-tech sectors where European or Asian alternatives exist might increasingly find themselves holding the short end of the stick in China.

China said Friday that it has begun a cybersecurity investigation of U.S. memory-chip maker Micron Technology. That has sparked fears that Beijing is finally retaliating against the sweeping chip-related export controls that the U.S. slapped on China in September 2022.

Beijing didn’t release many details on the probe and it is unclear what potential outcomes might be, but Micron’s shares fell 4.4% on Friday.

CHINA EXPERT PREDICTS WHERE US WILL 'SEE THE NEXT WAR START'

Companies based in mainland China accounted for 11% of Micron’s revenue for the fiscal year ended last September. Hong Kong companies made up another 5%. And given that many foreign electronics companies base their manufacturing operations in China, the total percentage of sales derived from buyers using Micron chips in the country is likely even higher.

Micron is a juicy target for a couple of reasons. Memory chips are commoditized products and alternatives are readily available. South Korea’s Samsung Electronics and SK Hynix are two larger players in the industry, for example. By targeting U.S. companies that make chips China desperately needs without easy substitutes, such as AI chips from Nvidia, Beijing would just be shooting itself in the foot. And the U.S. has placed export restrictions on the most cutting-edge of those chips anyway.

Memory chips are also one of the areas where the U.S. chip sector restrictions have damaged China the most. Its domestic champion Yangtze Memory Technologies was placed on the entity list in December, meaning U.S. companies have to get a license to do business with it. The company has been one of the few Chinese chip companies at the technological cutting edge—but lack of access to top quality U.S. and allied chip manufacturing equipment has now cast its future in doubt.

On the other hand, the fact that memory chips are commoditized products could in some ways make Beijing’s fusillade less effective. Companies such as Samsung and SK Hynix may win some additional orders in China, but Micron can also reroute its products elsewhere.

HOUSE PASSES BIPARTISAN BILL TO REVOKE CHINA’S ‘DEVELOPING COUNTRY' STATUS

Still, Beijing has picked a good time for a punch in the gut. The memory-chip market—and Micron—is facing a global supply glut. The company last week reported a 53% plunge in revenue for the fiscal second quarter, and expects revenue will be down 57% year over year this quarter. The company’s loss also widened as memory-chip prices have dived.

Shares of Samsung and SK Hynix were down on Monday too, though they might potentially benefit. The fact that they increasingly have to pick sides between Beijing and Washington could weigh on future profits. They also have fabrication plants in China. Chinese chip stocks, on the other hand, rallied on Monday as they are perceived as benefiting from China’s drive to develop its own semiconductor industry.

CLICK HERE TO GET THE FOX BUSINESS APP

The chip war between the two superpowers is here to stay. The U.S. has the upper hand technologically, but China’s vast market is also a significant weapon. As in the aviation sector, when high-tech alternatives to American products are available, Beijing won’t hesitate to make its displeasure clear.