Yangtze Memory Technologies Co (YMTC), noted as China’s leading flash memory chip producer, has initiated legal proceedings against the U.S. Department of Defense, contesting a ruling that placed the tech company on a list of entities purportedly collaborating with China’s military. The lawsuit, lodged on Friday in the federal courthouse located in Washington, requested that a judge prohibit the enforcement of this classification and nullify the designation altogether. Earlier in January 2024, the Pentagon included YMTC on its roster of Chinese military firms active within the United States, and this classification was reaffirmed later this year.
YMTC specializes in developing cutting-edge flash memory technologies utilized in consumer devices such as laptops and smartphones. Within its lawsuit against the Pentagon, YMTC asserts that it has no connections to the People’s Liberation Army or the defense industry of China. Additionally, on Friday, YMTC filed a lawsuit against the U.S. Commerce Department to contest its 2022 placement on a different agency list that imposes limitations on access to American technology. YMTC argues that it maintains a strong export compliance program and points out that the Commerce Department has not claimed any violations of U.S. export laws.
On Monday, the Defense Department chose not to comment. Neither the Commerce Department nor YMTC provided immediate responses to requests for comments. The case against the Defense Department argues that the agency utilized outdated and incorrect data to reach the conclusion that YMTC was linked to China’s Ministry of Industry and Information Technology. The lawsuit claims this designation has resulted in “significant and ongoing financial and reputational harm,” including the loss of business opportunities with American partners. YMTC maintains that its products are intended for commercial use and do not conform to military specifications. Furthermore, the company emphasizes that it has never provided its technologies or products for military applications. Two additional companies, drone manufacturer DJI and lidar producer Hesai Group (ZN80y.F), facing similar U.S. classifications, have appealed after courts rejected their lawsuits disputing their inclusion. Both entities have denied any connections to the military of China.