Chinese chip equipment maker Advanced Micro-Fabrication Equipment (AMEC) has filed a lawsuit against the US Department of Defense (DoD) after it was labeled a Chinese Military Company.

Being added to the list this January caused the company "serious and irreparable," harm, AMEC said. Some US companies are banned from working with businesses included on the CMC Section 1260H List, and US individuals are restricted from investing in the company.

Smartphone maker Xiaomi was previously added and removed from the list after it successfully sued. Last week, The Financial Times reported that the Pentagon removed Hesai, the world's biggest laser sensor maker, from the blacklist.

Shanghai-based AMEC claimed that the DoD “provided a single basis” for adding it to the blacklist, the fact that the company won an award from the Ministry of Industry and Information Technology in 2019.

“We are deeply shocked by the designation of AMEC again on the military-related list by the DoD. Such designation was wrong and groundless,” AMEC’s chairman and CEO Gerald Yin Zhiyao said on WeChat. The company was previously added to the list in 2021, but was then removed from it later that year.

AMEC supplies tools to chipmakers like SMIC and TSMC. Last year, the company received 124.4 million yuan (US$17.4 million) in subsidies from the Chinese government, a 22 percent increase over the year before, as the nation continues to push for semiconductor self-sufficiency.

The company was joined on the CMC list by China Telecom, Yangtze Memory Technologies, Beijing Megvii Technology, and others.