Chipmaker CXMT sues Pentagon over 'Chinese military company' designation (updated)

Alibaba Holding

29/08/2026 01:42

CXMT the latest Chinese firm to challenge Pentagon designation
Inclusion on list comes with government contracting restrictions 
CXMT says designation was arbitrary and violated its due-process rights
Adds CXMT statement in paragraph 5, revenue surge in paragraph 6
By Che  Pan and Mrinmay Dey
Aug 28 (Reuters) - China's top memory chipmaker, ChangXin Memory Technologies 688825.SS, sued the Pentagon on Friday over being placed on a list of companies the U.S. says are aiding Beijing's military.
"CXMT is not affiliated with the Chinese military," the company said in the federal lawsuit. "CXMT designs, produces, and sells its DRAM chips for civilian and commercial use, not for military use."
The U.S. Defense Department told Reuters in a statement: "As a matter of policy, the Department does not comment on pending or ongoing litigation."
The Pentagon designated CXMT a Chinese military company under the Biden administration, and the Trump administration kept the company on the list in a June update.
CXMT's lawsuit seeks to overturn the designation and remove itself from a Pentagon list that can trigger government contracting restrictions and reputational damage.
"Since its initial designation in January 2025, CXMT has continuously suffered reputational and commercial harm," the company said in a statement to Reuters, adding that it is pursuing the action to protect its business interests.
CXMT is China's top maker of dynamic random-access memory chips, which are widely used in smartphones, personal computers, servers, artificial intelligence systems and other electronics. The company, whose revenue spiked 874% in the first half, hopes to enter the U.S. market in the long term, Reuters has reported.
Its lawsuit, filed in the U.S. District Court for the District of Columbia, names the Department of Defense, Defense Secretary Pete Hegseth, Deputy Defense Secretary Steve Feinberg and Assistant Secretary of Defense for Industrial Base Policy Michael Cadenazzi as defendants.
CXMT argues that the Pentagon's decision was "arbitrary," lacked evidentiary support and violated its due-process rights.
According to the complaint, the company spent more than a year providing the Pentagon with information to challenge the designation, seeking removal from the list.
CXMT said the Pentagon published a notice in February stating that the company would be removed from the list but withdrew the notice the same day. The company alleged that the Defense Department subsequently did not adequately explain the change when it relisted it.
"None of these determinations is supported by the factual record, by applicable law, or by reasoned decision-making," CXMT said.
CXMT's lawsuit mirrors that of other Chinese companies. In June, Alibaba 9988.HK, the Chinese ‌technology and e-commerce giant, sued the U.S. government over being placed on the list.
Smartphone and electric-vehicle maker Xiaomi 1810.HK got itself removed in 2021 by filing a suit in a U.S. court.

 (Reporting by Che Pan, Christian Martinez, Mrinmay Dey; Editing by Caitlin Webber, William Mallard, Stephen Coates, and Eduardo Baptista)
 ((christian.martinez@thomsonreuters.com))