CXMT sues US Defense Department over blacklist to protect business interests, firm tells GT
CXMT File photo: VCG
China's leading memory chipmaker Changxin Memory Technologies Inc (CXMT) has filed a lawsuit against the US Defense Department over its erroneous designation of CXMT as a “military company,” with Chinese experts saying Washington's arbitrary blacklisting scheme is a politically driven move that serves tech hegemony and violates market economy rules.
"CXMT is not a military company and has no affiliation with the Chinese military. It designs and manufactures DRAM products for commercial and civilian use only, not for military use," the company said in a statement sent to the Global Times on Saturday.
Since its initial designation in January 2025, CXMT has continuously suffered reputational and commercial harm, the company said in the statement, adding that it is pursuing this action to protect its reputation and business interests.
The US Defense Department first designated CXMT as a military company in January 2025. The company said it spent more than a year providing information to challenge the designation and seek removal from the list. CXMT argues that the Pentagon's decision was "arbitrary", lacked evidentiary support and violated its due-process rights, according to Reuters.
According to Reuters, the US Defense Department in June identified 188 Chinese entities, again including CXMT, that it claims meet the statutory requirements for inclusion on the most recent 1260H List.
Under recent US law, the US Defense Department will be prohibited from contracting directly with companies on the list, and from buying their products or services via third parties beginning in 2027.
The lawsuit, filed in the US District Court for the District of Columbia on Friday, names the US Department of Defense, Secretary of Defense Pete Hegseth, Deputy Secretary Steve Feinberg and Assistant Secretary of Defense for Industrial Base Policy Michael Cardinale as defendants. CXMT argued that the Pentagon's decision was "arbitrary," lacked evidentiary support and violated its due-process rights, Reuters reported.
CXMT’s legal challenge comes amid broader tensions over US restrictions on Chinese technology firms. Washington has repeatedly targeted sectors it sees as critical to China’s technological rise, including semiconductors, telecommunications and artificial intelligence (AI), through blacklists, export controls and investment restrictions.
The US has continued its “small yard, high fence” approach aimed at Chinese technology firms, expanding restrictions across multiple fronts under the banner of national security. Using the accusation of “military affiliation” is just one of the common measures in Washington’s broader containment strategy, Ma Jihua, a veteran industry analyst, told the Global Times on Saturday. This practice lacks sufficient evidence and imposes restrictions on enterprises based solely on administrative determinations. In essence, it serves tech hegemony under the guise of national security, Ma said.
Ma noted that such external pressure will instead force China to accelerate independent innovation and industrial chain improvement. "For CXMT, short-term pressure is inevitable, but in the long run, external suppression will further strengthen domestic market confidence in homegrown chips and push China to achieve breakthroughs in key core technologies," he said.
Despite US restrictions, CXMT has demonstrated strong operational resilience, continuing to expand capacity and advance its technology. According to the company’s first-half financial results, it reported a swing to profit and a nearly tenfold increase in revenue to 150.31 billion yuan ($22.37 billion) in the first half of the year. The result outperformed its own forecasts in its first financial results since a blockbuster Shanghai listing, said the South China Morning Post.
For many Chinese enterprises, such lawsuits not only provide a path to seek redress, but also demonstrate their willingness to address disputes through formal legal procedures., Xiang Ligang, a veteran telecom observer, told the Global Times on Saturday.
Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Saturday that CXMT’s decision to sue the Pentagon demonstrated that Chinese technology companies are increasingly willing to defend their legitimate rights through legal channels, while also presenting evidence of their compliance, civilian focus and market-oriented operations.
“Filing lawsuits is a positive and effective way for Chinese companies to counter discriminatory moves,” Zhou said. These enterprises have extensive business operations in the US and have brought abundant development opportunities to local stakeholders. By filing lawsuits, the companies aim not only to safeguard their reputation and business operations but also to preserve room for growth for their business partners, he added.
Prior to CXMT's move, several other Chinese companies, including Alibaba and WuXi AppTec, filed similar lawsuits against the US Defense Department over their inclusion on the 1260H list.
Analysts said these companies’ moves could test the scope of US administrative discretion in blacklisting Chinese companies and further sharpen debate over the use of national security tools in economic competition.
Chinese Foreign Ministry spokesperson Lin Jian said on June 9 that China firmly opposes the US overstretching the concept of national security and formulating various discriminatory lists to go after Chinese businesses.
"We urge the US to correct its wrongdoings and stop the unwarranted suppression of Chinese businesses," Lin said, adding that China will do what is necessary to firmly protect the legitimate and lawful rights and interests of its companies.
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