Chipmaker CXMT sues Pentagon over ‘Chinese military company’ designation

Chinese memory chip giant ChangXin Memory Technologies (CXMT) filed a federal lawsuit against the U.S. Department of Defense on Friday, contending its designation as a "Chinese military company" by the Pentagon. The lawsuit claims the designation harms CXMT's business interests through potential contracting restrictions and reputational damage.

CXMT is China's leading manufacturer of dynamic random-access memory chips, utilized across various devices including smartphones, personal computers, servers, AI systems, and more. The company's revenue surged 874% in the first half of the year, with long-term aspirations to enter the U.S. market.

In the lawsuit filed in the US District Court for the District of Columbia, CXMT names the Department of Defense (DoD), Defense Secretary Pete Hegseth, Deputy Defense Secretary Steve Feinberg, and Assistant Secretary of Defense for Industrial Base Policy Michael Cadenazzi as defendants. The company asserts that the Pentagon's decision to label it as a military entity was arbitrary, unsupported by evidence, and violated due-process rights.

According to CXMT's complaint, it provided the DoD with information for over a year to contest the designation but received a notice in February stating removal from the list, which was subsequently withdrawn. The company alleges the Pentagon did not adequately explain the change when it later relisted the company.

The Pentagon maintains a policy of non-comment on pending litigation. In response to the lawsuit, a DoD spokesperson stated: "As a matter of policy, the Department does not comment on pending or ongoing litigation."

In June, Alibaba, another major Chinese technology company, also sued the U.S. government over its placement on the same list. Xiaomi, a Chinese smartphone and electric-vehicle manufacturer, successfully removed itself from the list in 2021 through a lawsuit in a U.S. court.