ChangXin Memory Technologies, better known as CXMT, has filed a lawsuit against the US Department of Defense over its inclusion on the Pentagon’s list of Chinese military-affiliated companies. The move follows a familiar playbook now being adopted by major Chinese tech firms facing a designation that, while stopping short of an outright ban, carries serious reputational and commercial consequences.
CXMT was reinstated to the Section 1260H list on June 8, 2026, alongside fellow chipmaker Yangtze Memory Technologies and a handful of other firms. The company had been briefly removed from the list in February before being added back, a reversal that appeared to accelerate its decision to pursue legal action.
What the 1260H list actually means
The Section 1260H list is a roster maintained by the Pentagon of companies it considers to be operating in support of, or on behalf of, China’s military. It does not ban private-sector transactions, but it restricts US government agencies and their defense contractors from doing business with listed entities.
CXMT is not the first Chinese firm to decide that litigation is a better response than quiet acceptance. Yangtze Memory Technologies filed its own lawsuit against the Pentagon in December 2025, arguing the designation violated the Administrative Procedure Act, a US law that governs how federal agencies make and apply rules. WuXi AppTec and Alibaba followed with similar challenges in June 2026.
A company on a very different growth trajectory
The lawsuit lands at a peculiar moment for CXMT. The company completed an IPO in July 2026 in which shares surged roughly 466% on listing, pushing the company’s valuation to approximately 3.28 trillion yuan, equivalent to around $485 billion.
CXMT is now the world’s fourth-largest DRAM manufacturer, competing in a market long dominated by Samsung, SK Hynix, and Micron. It has secured a multi-billion-yuan supply agreement with Tencent and is targeting production capacity of more than 350,000 wafers per month by the end of 2026.
What the legal challenge could accomplish
The Administrative Procedure Act argument, the same one YMTC is deploying, essentially asks a court to scrutinize whether the Pentagon followed proper process when it added or reinstated these companies to the list. It is less about proving the underlying factual claim false and more about whether the agency played by its own rules.
For CXMT specifically, the reinstatement after a February removal is a notable detail. A temporary removal followed by quick reinstatement suggests the underlying designation is contested even within the process itself, and that sequence could form part of CXMT’s argument that the agency’s decision-making was inconsistent or procedurally flawed.