For One Day in February, the Pentagon Took CXMT Off Its Blacklist. Now CXMT Is Suing to Make It Permanent.
- $489 Billion CXMT's briefly-held peak market capitalization after its Shanghai debut surged 466% — a separate figure from the roughly $9 billion the IPO itself raised — SCMP / CNBC, Jul. 27, 2026
- 188 Entities companies on DOD's updated Section 1260H list as of June 2026, up from 134 the year before — CXMT and Yangtze Memory Technologies both retained — DOD 1260H list, Jun. 8, 2026
- 1+ Year how long CXMT says it spent submitting evidence to the Pentagon challenging its designation before filing suit — CXMT complaint, Aug. 28, 2026
- 8% CXMT's share of the global DRAM market, the fourth-largest behind Samsung, SK Hynix, and Micron — up from 3% a year earlier — Counterpoint Research
On August 28, 2026, ChangXin Memory Technologies — CXMT, mainland China’s largest maker of DRAM memory chips — filed suit in the U.S. District Court for the District of Columbia against Defense Secretary Pete Hegseth, Deputy Defense Secretary Stephen “Steve” Feinberg, and Assistant Secretary of Defense for Industrial Base Policy Michael P. Cadenazzi. The complaint challenges CXMT’s place on the Pentagon’s Section 1260H list of “Chinese military companies,” arguing the designation was arbitrary and unsupported by the record: “None of these determinations is supported by the factual record, by applicable law, or by reasoned decision-making,” the complaint states.
The 1260H list is not the Commerce Department’s Entity List, the tool more familiar from prior chip-export fights — a distinction that matters for what this lawsuit can and can’t change, covered in full below. And the suit landed less than a day before this report went to publication, too recent for any video coverage of the filing itself to exist.
The clips embedded on this page instead document CXMT’s meteoric Shanghai stock debut a month earlier and the closely related lawsuit Alibaba filed against the same list two months before CXMT did — background for a fast-moving case, not coverage of the complaint.
CXMT filed in the same D.D.C. courthouse that handled the closest precedent to this case, and named three individual Pentagon officials as defendants rather than the Department of Defense alone. Feinberg, a former co-founder of Cerberus Capital Management, was confirmed by the Senate 59-40 and sworn in as deputy secretary on March 17, 2025. Cadenazzi was sworn in as assistant secretary for industrial base policy on September 23, 2025.
The complaint says CXMT spent more than a year submitting evidence to DOD challenging the designation before suing, and argues the Pentagon’s process violated its due-process rights on top of being arbitrary. In its own public statement, reported by Global Times and consistent with Reuters’ coverage of the filing, CXMT said: “CXMT is not affiliated with the Chinese military… [it] designs, produces, and sells its DRAM chips for civilian and commercial use, not for military use.”
“None of these determinations is supported by the factual record, by applicable law, or by reasoned decision-making.”
CXMT's complaint, U.S. District Court for the District of Columbia, Aug. 28, 2026
The Pentagon has offered no rebuttal on the record. Asked about the suit, a DOD spokesperson gave the department’s standard line: “As a matter of policy, the Department does not comment on pending or ongoing litigation.” The case is pending; no court has ruled, and the arguments above are CXMT’s claims, not adjudicated findings.
Section 1260H of the National Defense Authorization Act for Fiscal Year 2021 requires the Pentagon to publish an annual roster of firms it assesses are “Chinese military companies” operating in the United States. The list’s binding legal effect is narrower than its name suggests: it bars the Department of Defense itself — and, starting in June 2027, DOD’s own contractors — from procuring goods or services from listed firms. It does not, by itself, ban private American companies from doing business with a listed firm.
In practice, though, a 1260H listing functions as a reputational and investor red flag well beyond its narrow procurement rule — financing, deal-making, and export relationships routinely get harder for a company once it’s named, even though nothing in the statute compels a broader boycott. That gap between the list’s legal text and its market effect is part of what CXMT’s complaint is arguing against.
The 1260H list this lawsuit concerns is separate from the Commerce Department’s Entity List, which imposes broader export-license restrictions on U.S. suppliers doing business with a listed firm. CXMT is not currently on the Commerce list. Rep. John Moolenaar (R-MI), chairman of the House Select Committee on the CCP, has co-signed a letter urging Commerce Secretary Howard Lutnick to add CXMT there too and “hold firm” on chip curbs — a distinct, still-pending push that this lawsuit does not address.
CXMT’s closest legal precedent is Xiaomi’s. In January 2021, the Pentagon designated the smartphone maker a “Communist Chinese military company” under a predecessor authority; Xiaomi sued in the same D.D.C. courthouse. On March 12, 2021, U.S. District Judge Rudolph Contreras granted a preliminary injunction, finding DOD’s designation process “deeply flawed” and unsupported by substantial evidence. Rather than keep litigating, the government agreed that May to remove Xiaomi from the list entirely.
A more immediate parallel came two months before CXMT filed. On June 23, 2026, Alibaba sued DOD over its own 1260H designation, running the identical legal theory — arbitrary and capricious, insufficient explanation, due process — that CXMT’s complaint now repeats. That case remains pending.
CXMT filed this lawsuit a month after one of the largest debuts in Chinese stock-market history. The company reported first-half 2026 revenue of roughly RMB 150.31 billion (about $22.37 billion), up nearly 874% year over year. Its Shanghai STAR Market IPO was priced to raise between RMB 57.9 and 66.6 billion (roughly $8.6 to $9.8 billion) — China’s second-largest IPO on record, the largest ever on the STAR Market, and Asia’s largest listing of 2026.
That IPO raise is a different number from what happened next, and the two shouldn’t be conflated: when CXMT’s shares closed up 466% on their July 27, 2026 trading debut, the company’s market capitalization briefly reached roughly RMB 3.3 trillion (about $489 billion) — making it, for a moment, the most valuable China-listed company on any exchange.
The valuation surge outran CXMT’s actual manufacturing position. Per Counterpoint Research, global DRAM market share breaks down as Samsung 38%, SK Hynix 29%, Micron 22%, and CXMT roughly 8% — fourth place, up from about 3% a year earlier, with Counterpoint forecasting CXMT could reach roughly 11% by 2028. Futurum’s Rolf Bulk, head of semiconductor equity research, told CNBC that CXMT’s chips are “around two to three generations” behind Samsung, SK Hynix, and Micron, and that the company “will not catch up… anytime soon.”
CXMT’s lawyers are almost certainly aware of how the Xiaomi case ended: not with a court ruling on the merits, but with the government choosing to drop the designation rather than defend it further in front of a skeptical judge. Whether DOD takes the same path with CXMT, keeps litigating, or wins outright is unresolved — Alibaba’s parallel suit, filed two months earlier on the same legal theory, hasn’t yet produced a ruling either.
Separately, Moolenaar’s push to add CXMT to the Commerce Department’s Entity List remains an open, unrelated question the Pentagon lawsuit does nothing to settle. For now, CXMT stays on the 1260H list, its IPO windfall stays intact, and the company that just posted the fastest revenue growth of any major DRAM maker heads into a courtroom fight whose closest precedent ended in the government backing down.
CXMT sued Hegseth, Feinberg, and Cadenazzi on August 28, 2026, arguing its Section 1260H “Chinese military company” designation is arbitrary and unsupported — a month after an IPO that briefly made it China’s most valuable listed company at roughly $489 billion, a separate figure from the roughly $9 billion the offering itself raised. The 1260H list is not the Commerce Entity List; it mainly restricts Pentagon and future contractor procurement, though it carries real reputational weight. The closest precedent, Xiaomi in 2021, ended with the government dropping the designation rather than defend it in court. Alibaba is running the identical legal argument two months ahead of CXMT. No court has yet ruled on either case.
