China on Sunday says products made by US memory chip giant Micron Technology are a national security risk.
It means the firm's products will be banned from key infrastructure projects in the world's second largest economy, reports BBC.
The announcement is the latest development in a deepening row between the US and China over the technology crucial to economies around the world.
It is China's first major move against a US chip maker, as tensions increase between Beijing and Washington.
The long-running dispute has seen Washington impose a series of measures against Beijing's chip making industry and invest billions of dollars to boost America's semiconductor sector.
In a statement, the Cyberspace Administration of China (CAC) said: "The review found that Micron's products have serious network security risks, which pose significant security risks to China's critical information infrastructure supply chain, affecting China's national security."
In response, the US government said it would work with allies to address what it called "distortions of the memory chip market caused by China's actions".
"We firmly oppose restrictions that have no basis in fact," a US Commerce Department spokesperson said.
The CAC's announcement came a day after a G7 leaders meeting in Japan issued a joint statement which criticised China, including its use of "economic coercion".
On Sunday, US President Joe Biden said G7 nations were looking to "de-risk and diversify our relationship with China".
"That means taking steps to diversify our supply chains," he added.
Micron chief executive Sanjay Mehrotra attended the summit in Hiroshima as part of a group of business leaders.
Bd-pratidin English/Golam Rosul
