ONE of China’s most prominent chip gear makers is suing the Pentagon for linking it to the People’s Liberation Army, seeking to get off a blacklist that bars business with American firms.
Advanced Micro-Fabrication Equipment (Amec) alleged that the defence agency harmed the company’s business and reputation by adding the Shanghainese entity to the so-called Section 1260H list of firms linked to China’s military. Pentagon officials took months to respond to a request for additional information, then justified their decision with evidence of an award from China’s Ministry of Industry and Information Technology, Amec said in its lawsuit.
Amec becomes the latest Chinese firm to try and overturn their addition to a blacklist intended to guard the US against national security threats. The company is considered one of the country’s foremost suppliers of equipment critical to semiconductor production, a key component of Beijing’s ambitions to ascend the geopolitical and technology ladder.
The US government has in past years grown increasingly concerned about what it calls China’s military-civil fusion strategy, describing that concept as regular civilian companies aiding the People’s Liberation Army in some fashion. That concern centres in particular on the country’s technology champions.
Amec competes with top US firms including Applied Materials and Lam Research. In its latest annual report, the Chinese company said some of its machines are now being used to make chips as advanced as 5-nanometres, or technology only one generation behind the most cutting-edge.
The Chinese company supplies to Huawei Technologies’s production partner Semiconductor Manufacturing International Corporation (SMIC) , Shanghai-based chipmaker Hua Hong Semiconductor, and Taiwan Semiconductor Manufacturing Company, according to Bloomberg supply chain data.
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Amec said in its complaint that its leadership is predominantly American. Its founder and chairman Gerald Yin, born in 1944, has a doctorate degree from UCLA and previously worked for Intel, Applied Materials and Lam, according to the annual report. Yin was identified as a US national in the company’s annual report for 2021.
Earlier this year, the Department of Defense (DOD) added Amec to its blacklist alongside several major Chinese tech firms including Yangtze Memory Technologies and an arm of Lidar-maker Hesai Group. Hesai Technology later sued the Pentagon, though the Financial Times reported this week that the US was now considering its removal.
“We are deeply shocked by the designation of Amec again on the military-related list by the DOD. Such designation was wrong and groundless,” Yin said in a statement posted on the company’s official WeChat account. “We believe that the court will make a fair ruling and order Amec removed from the CMC List. Meanwhile, we are actively working to maintain communication with the DOD in order to properly resolve the dispute.”
The current Section 1260H list includes fellow chip-industry names Huawei and SMIC. In 2021, the Biden administration agreed to remove Chinese smartphone giant Xiaomi from the list, after a US court sided with the company and placed a temporary halt on the ban.
An e-mail sent to the Pentagon’s duty office did not elicit a response after normal business hours. BLOOMBERG
