China’s AMEC Dropped From Pentagon Blacklist After Suing US

(Bloomberg) — Advanced Micro-Fabrication Equipment Inc. has been removed from the US Department of Defense’s list of Chinese military companies, doing away with what the firm described as an “irrational” designation.

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The producer of chipmaking equipment was placed on the Pentagon’s blacklist, which doesn’t carry specific sanctions but tends to discourage US firms from trading with named entities, in January and strongly disputed it had any links to China’s People’s Liberation Army. Shanghai-based AMEC then sued the Defense Department in August, and the agency this month updated its list to remove it and IDG Capital.

AMEC’s shares rose by as much as 5.8% on Wednesday after the change was publicized, helping a rally of as much as 1% in Shanghai-listed stocks.

The company provides a wide range of gear and machinery for chipmakers, with dry-etching equipment accounting for the bulk of its revenue. Its clients include Yangtze Memory Technologies Co., a 3D NAND maker in China. YMTC remains on the Pentagon list, though it too has refuted it has any links to the PLA. The Wuhan-based memory maker is developing products to compete with industry leaders Samsung Electronics Co. and SK Hynix Inc.

AMEC and YMTC are important players in developing China’s domestic chipmaking capabilities, something that Beijing has elevated into a national priority as the country pursues self-sufficiency. The Pentagon’s so-called Section 1260H list — identifying companies connected to the Chinese military operating in the US — is one part of a wide-ranging set of sanctions and designations that the US uses to rein in China’s access to advanced technology.

–With assistance from Gao Yuan.