Chinese flash memory chip giant, YMTC, denies links with Chinese military

Chinese flash memory chip giant, YMTC has denied connections with the Chinese military, asserting that it is actively engaging in discussions with Washington to address the allegations after it was named on a U.S. Defense Department list of firms deemed as posing national security risks.

Chinese flash memory chip giant Yangtze Memory Technologies Corp (YMTC) has vehemently denied any connections with the Chinese military, asserting that it is actively engaging in discussions with Washington to address the allegations after it was named on a U.S. Defense Department list of firms deemed as posing national security risks.

In response to inquiries, YMTC (Yangtze Memory Technologies Corp) released a statement on Saturday, stating, “We are in the process of working with the U.S. government to address our inclusion on the 1260H list, which was imposed without prior notification.” The company, based in Wuhan, clarified that it is an integrated device manufacturer primarily focused on the design and production of 3D NAND flash memory.

The statement underscored that YMTC’s technology is not military-grade and is not intended for military applications. As a private company, YMTC said that it is neither owned nor controlled by the Chinese military, strongly invalidating any allegations that it poses a threat to U.S. national security.

The inclusion of Yangtze Memory Technologies Corp on the U.S. Defense Department’s list has raised concerns and prompted the company to proactively involve Washington to clarify its position and address any potential misperceptions.

YMTC’s role as a significant player in the flash memory chip industry has amplified the significance of this development. Flash memory chips are widely used in various consumer electronics, from smartphones to laptops, and their potential role in military applications has brought companies in this sector under increased scrutiny across the globe. YMTC is a very well-known firm in China among more than a dozen Chinese tech companies added prior this week to the U.S. Defense Department-administered 1260H list. This was established under the National Defense Authorization Act for the accounting year 2021. The defence department is responsible for annually updating the list.

As per Pentagon’s alleges these companies pose a risk to national security in an acceleration to U.S.-China tensions connected to the hi-tech industry. Being on the list renders the firms ineligible for Defense Department contracts but it does not mean a complete ban by the United States. This label could lead to blacklisting by the Treasury Department of the U.S. resulting in restraining the business prospects of the companies.

The artificial intelligence companies Yitu Technology and Beijing Megvii, lidar maker Hesai Technology, tech company NetPosa, and drone maker Chengdu JOUAV were accused by the Pentagon on Wednesday of having links with the Chinese military. The U.S. listed Hesai stated to the Post on Friday that it did not sell any products to any military in any country. It also added that its products are designed for the use of civilians only and classified accordingly.

The United States commerce department added YMTC to a trade blacklist in December 2022 stating national security risks. This trade blacklist was called an Entity List. This resulted in crippling the chip maker’s access to equipment and also affected the maintenance services from various global semiconductor tool firms like Lam Research. Last year, YMTC intensified its link with domestic tool makers that also included Beijing Naura Technologies to ensure its production continuity.

The incident highlights the intricate challenges faced by technology companies operating in an increasingly complex geopolitical landscape, where national security issues intertwine with economic interests.