Chinese memory chip maker YMTC files lawsuit in US court, accusing website publisher of libel

YMTC, the leading flash memory chip manufacturer in China, has taken legal action against a Danish consulting firm and its senior executive. The lawsuit comes as concerns about national security threats from Chinese tech companies continue to be widely discussed in Western narratives.

YMTC, based in Wuhan, filed the lawsuit in the Northern District Court of California in early June. The company claims that Strand Consult, headquartered in Copenhagen, and its executive vice-president, Roslyn Layton, published multiple false reports. These reports have allegedly caused significant damage to YMTC’s market reputation and business relationships, according to a court document seen by the Post.
YMTC stated in a document that China Tech Threat (CCT) has been spreading false and outrageous statements about the company and its products since September 2020. In a 2022 report titled “How Apple’s partnership with Chinese military chip maker YMTC threatens American National Security,” co-authored by Layton, YMTC is referred to as a “Chinese semiconductor maker with known ties to the Chinese military,” an accusation that YMTC strongly denies. For comprehensive coverage and analysis of the most important global topics and trends, visit SCMP Knowledge, our new platform featuring curated content, explainers, FAQs, analyses, and infographics by our award-winning team.
According to the CCT report, YMTC’s memory chips were accused of having spyware that could collect data and send it back to Beijing, compromising the security and privacy of iPhone users. However, YMTC dismissed these claims as “pure fiction” since memory devices do not have the capability to perform such functions.

In response to the report, YMTC expressed their concern about the irreversible damage caused to their reputation and business relationships. They emphasized their support for healthy competition and innovation, while strongly opposing anti-competitive practices. The company also stated their willingness to clarify any misconceptions and set the record straight.

In a previous response to the Post, YMTC clarified that they have never supplied their technology or products for military purposes.
According to YMTC, they solely provide products and services for commercial and civil customers. They claim to have no knowledge or involvement in any military-related projects that have utilized their products.

When contacted through her LinkedIn page, Layton did not immediately respond to a request for comment.

In November of last year, YMTC filed a lawsuit against US memory chip maker Micron Technology, accusing them of patent infringement. YMTC alleges that Micron and its subsidiary Micron Consumer Products Group infringed upon eight of their patents, claiming that Micron was unfairly protecting its market share.

The illustration photo shows the YMTC logo placed alongside the Chinese flag.
YMTC and other Chinese foundries have been dealing with US sanctions on the export of advanced semiconductor tools and services to China. YMTC was blacklisted in December 2022, and in April 2023, Beijing launched a cybersecurity review into Micron.

Despite these challenges, YMTC has managed to continue its progress and meet the growing demand for its chips. The company has formed closer partnerships with domestic suppliers to replace US components in its chip-making equipment and protect its production integrity.

China is actively working to reduce its reliance on foreign semiconductor products due to increased export controls. YMTC has seen a surge in demand for its flash memory chips, particularly for government-backed projects, making it a top choice for NAND-based data storage solutions.
This article was initially published in the South China Morning Post (SCMP), a highly respected source for news on China and Asia with over a century of experience. To read more articles from SCMP, you can visit their app or check out their Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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