China has said it found "relatively serious" cybersecurity risks from chips made by US semiconductor giant Micron amid an escalating technology battle between the superpowers.

The world’s second-largest economy announced the American manufacturer failed to pass a cybersecurity review because its components caused "significant security risks to our critical information infrastructure supply chain," which would affect national security.

Washington has already blacklisted several Chinese tech firms, cut off the flow of sophisticated processors and banned Americans from providing certain help to the Chinese chip industry. 

In a statement, the US Commerce Department said Beijing's conclusion had "no basis in fact" and Washington will continue to try and limit industry disruptions with its allies.

Shares in Micron's biggest industry rivals, Samsung and SK Hynix gained overnight in Seoul. 

Chinese chip stocks including sector bellwethers Semiconductor Manufacturing International and Hua Hong Semiconductor climbed more than 3pc in Hong Kong.

US President Joe Biden had voiced optimism about the China relationship on Sunday at the end of the G7 summit in Japan, saying he expected ties between the two countries will start to "thaw very shortly".

Read the latest updates below.