Chinese flash memory maker YMTC sues US over military designation

By Mike Scarcella

WASHINGTON, Dec 8 (Reuters) – China’s top flash memory chipmaker Yangtze Memory Technologies Co (YMTC) has sued the U.S. Defense Department, challenging a decision to include the technology company on a list of entities allegedly working with Beijing’s military.

The lawsuit, filed on Friday in the federal court in Washington, asked a judge to block enforcement of the listing and have the designation thrown out. The Pentagon added YMTC to its list of Chinese military companies operating in the U.S. in January 2024 and reaffirmed the designation earlier this year.

YMTC develops advanced flash memory technology used in consumer electronics including laptops and mobile phones. In the lawsuit against the Pentagon, YMTC said it has no ties to the People’s Liberation Army or China’s defense sector.

YMTC also sued the U.S. Commerce Department on Friday to challenge its inclusion in 2022 on a separate agency list that restricts access to American technology. YMTC contends it has a robust export compliance program and said Commerce has never alleged it violated U.S. export control laws.

The Defense Department on Monday declined to comment. The Commerce Department and YMTC did not immediately respond to requests for comment.

The lawsuit against the Defense Department said it relied on outdated and inaccurate information to conclude YMTC was affiliated with China’s Ministry of Industry and Information Technology. It said the designation has caused “significant and ongoing financial and reputational harm,” including lost business with U.S. partners.

YMTC said its products are commercial-grade and do not meet specifications for military use. The company said it has never supplied its technology or products for military purposes.

Two other companies facing similar U.S. designations, drone maker DJI and lidar manufacturer Hesai Group (ZN80y.F), have appealed after courts dismissed their lawsuits challenging their inclusion. Both companies have denied ties to China’s military.

(Reporting by Mike Scarcella; Editing by Andrea Ricci )