China says products made by US memory chip giant Micron Technology are a national security risk.
The country's cyberspace regulator announced on Sunday that America's biggest maker of memory chips poses "serious network security risks".
It means the firm's products will be banned from key infrastructure projects in the world's second largest economy.
It is China's first major move against a US chip maker, as tensions increase between Beijing and Washington.
"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," the Cyberspace Administration of China (CAC) said in a statement.
The CAC did not give details of the risks it said it had found or in which Micron products it had found them.
A Micron spokesperson confirmed to the BBC that the company had "received the CAC's notice following its review of Micron products sold in China".
"We are evaluating the conclusion and assessing our next steps. We look forward to continuing to engage in discussions with Chinese authorities," they added.
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.
"This action, along with recent raids and targeting of other American firms, is inconsistent with [China's] assertions that it is opening its markets and committed to a transparent regulatory framework," it added.
The announcement from the CAC is the latest development in an ongoing dispute between Washington and Beijing, which has seen the US impose a number of measures against China's chip making industry.
The CAC's announcement also 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.
Last week, the company said it would invest around 500bn yen ($3.6bn; £2.9bn) to develop technology in Japan.
BDST: 1223 HRS, MAY 22, 2023