‘Chinese semiconductor star’ CXMT sued the US Department of Defense

“CXMT has no connection with the Chinese military. We design, manufacture and sell DRAM for civil and commercial purposes, not for military operations,” the Chinese memory manufacturer said in a lawsuit filed with the US District of Columbia Federal Court on August 28.

The lawsuit targets the US Department of Defense, Secretary of Defense Pete Hegseth, Deputy Secretary of Defense Steve Feinberg and Assistant Secretary of Defense for Industrial Platform Policy Michael Cadenazzi.

In the application, CMXT said that in January 2025, the Pentagon listed them as a company owned by the Chinese military. It took them more than a year to provide rebuttal information and call on the US Department of Defense to reverse the decision.

In February, the Pentagon sent a notice that CXMT would be de-identified, but withdrew the document a few hours later. In the June list update, the US Department of Defense maintained the designation for CXMT.

CXMT criticized the Ministry of Defense’s decision for being “arbitrary”, lacking evidence and violating due process. The business asked the US court to rule to reverse the Pentagon’s move, arguing that the decisions of the Ministry of Defense had damaged their reputation and caused them to suffer a series of restrictions when signing contracts.

The US Department of Defense stated that it “does not comment on ongoing proceedings”, saying that this is a long-standing policy.

In June, Alibaba also sued the US government for being listed as a business linked to the Chinese military.

CXMT is currently the world’s fourth largest DRAM memory chip manufacturer with 7.7% global market share, after Samsung Electronics, SK Hynix and Micron Technology.

The company was founded in 2016 in Hefei city, Anhui province, initially called Innotron. The business was launched the same year as Fujian Jinhua Integrated Circuit (JHICC) and Xi’an UniIC Semiconductors, two of China’s major semiconductor factories, aiming to compete with global computer memory makers.

WSJ evaluates CXMT as a “bright star” in the list of Chinese semiconductor companies, with the expectation of helping to improve its autonomy in the race with the US. Beijing is promoting businesses like CXMT to become leaders, alongside SMIC and AMEC.

However, CXMT is still behind its competitors in advanced memory technology, especially the HBM high-bandwidth memory chip that plays an essential role in Nvidia’s AI processors. The company also faces US export control policies, making it impossible to own state-of-the-art equipment, making it difficult to narrow the technology gap with Samsung or SK Hynix.