One of the major barriers to the adoption of China's DRAM and NAND products was the inclusion of CXMT and YMTC in the Pentagon's Section 1260H list, but in a new update, they have now been moved out.
YMTC & CXMT Can Now Participate In US DoW Contracts, But Business With OEMs Isn't Entirely Risk-Free
[Update]: The Pentagon has withdrawn the document that suggested updates to Section 1260H, and we haven't seen any updates from the Department of War (DoW) on it yet.
[Original]: Well, it appears the prospect of manufacturers sourcing Chinese memory and NAND products has become much stronger, given that one of the major factors holding it back is, of course, political considerations. But now, in the latest update to the Pentagon's Section 1260H list, it is noted that CXMT and YMTC will be removed, allowing the companies to operate without being labeled a threat to national security. This does open up a massive window for both Chinese entities to sell their products to US-focused manufacturers, but for now, it is too early to say whether we will actually see adoption.
For those unaware, the Section 1260H list is a list of companies categorized as "Communist Chinese Military Companies" (CCMCs) maintained by the US Department of War, intended to prevent such firms from operating on US soil, either directly or indirectly. Entities on the list are seen as threats to the US supply chain, which is why firms avoid doing business with them. YMTC was one of the first Chinese NAND manufacturers added to the Section 1260H list back in 2024, while CXMT joined it in early 2025.
The Deputy Secretary of Defense has determined that the following previously listed entities
should be removed from the most recent Section 1260H List announced on January 7, 2025:
- ChangXin Memory Technologies, Inc. (CXMT)
- Yangtze Memory Technologies Co., Ltd. (YMTC)
With CXMT and YMTC out of Section 1260H, both companies can now be part of contracts under the US Department of War, but there's a caveat we'll discuss ahead. However, one of the major benefits of this is an improved reputation for Chinese companies, given that, as we discussed previously, major PC manufacturers are now in contact with both CXMT and YMTC to find prospects for securing DRAM and NAND supply contracts.
Even if YMTC and CXMT are not on the Pentagon's restricted list, they still face restrictions from the US Commerce Department, particularly YMTC, which is on the Entity List, posing a risk to supply chain partners. Given that OEMs do show 'consistent' interest in adopting Chinese elements into end products, we could see US regulations step in as well, which is why manufacturers are proceeding with caution in the first place.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
Follow Wccftech on Google to get more of our news coverage in your feeds.
