Intel is under renewed national-security scrutiny after it emerged that the U.S. chipmaking giant tested semiconductor-manufacturing tools from ACM Research—a company with long-standing ties to China and two subsidiaries previously hit with American sanctions. According to sources familiar with the matter, Intel evaluated two ACM wet-etch tools earlier this year for potential integration into its upcoming 14A manufacturing process, scheduled to debut in 2027.
Although there is no evidence that Intel violated U.S. export regulations, the revelation has triggered concerns among lawmakers and national-security analysts, who argue that the use of equipment from a firm with sanctioned units poses strategic risks ranging from intellectual-property exposure to the potential for foreign interference in U.S. chip production.
Intel’s Tool Tests Raise Security Red Flags
The tools in question—wet-etch systems used to remove materials from silicon wafers—were provided by ACM Research, a U.S.-headquartered company whose major R&D and manufacturing operations are based in Shanghai. Two of ACM’s overseas units, one in China and one in South Korea, were sanctioned in 2024 over alleged support for Chinese military-linked technology development. ACM denies wrongdoing.
Intel has not confirmed whether it will adopt ACM’s tools for mass production, but acknowledged that it frequently evaluates third-party equipment as part of its advanced-node development. ACM, meanwhile, said its U.S. division operates independently from its Shanghai entity and follows strict protocols to protect sensitive trade secrets.
Still, critics warn that the testing alone highlights a loophole in U.S. technology-protection policies. Chris McGuire, a former White House National Security Council official, argued that equipment linked to China-based operations could present avenues for espionage or disruption. According to McGuire, allowing Chinese-affiliated toolmakers into the U.S. semiconductor supply chain risks both production stability and strategic advantage.
Political Tensions Add Pressure to U.S.–China Chip Rivalry
The issue comes at a time when geopolitical tensions over chip manufacturing continue to escalate. While former President Donald Trump has softened some export restrictions—including authorizing Nvidia to resume selling certain advanced AI chips to China—lawmakers from both major U.S. parties are pushing for tighter controls.
A bipartisan bill introduced earlier this month aims to prohibit any U.S.-subsidized semiconductor firm from using Chinese-made equipment in factories benefiting from government funding. With Intel among the companies receiving billions in federal incentives under recent industrial-policy initiatives, the company’s testing of ACM tools has intensified debate in Washington.
The Chinese embassy in Washington criticized what it called the “politicization” of commercial ties, insisting that normal business cooperation should not be viewed through a national-security lens.
ACM’s Deep Roots in China Raise Additional Questions
ACM Research was founded in 1998 by David Wang, an American citizen with permanent residency in China. While headquartered in California, the company has built extensive operations in Shanghai’s Zhangjiang High-Tech Park, where most of its R&D, engineering, and manufacturing activities occur. The firm also supplies equipment to several Chinese companies previously sanctioned or scrutinized by U.S. officials, including SMIC, YMTC, and CXMT.
In recent years, ACM has sought to expand globally. In 2023, it opened a new facility in Hillsboro, Oregon—close to Intel’s flagship R&D hub—fueling speculation that Intel is becoming an increasingly important customer. A U.S. hedge fund report earlier this year noted that ACM tools were being qualified in Oregon for potential use in Intel’s production lines.
ACM says it is not a major supplier to any leading U.S. chip manufacturers but acknowledged shipping three tools to a significant American customer.
China’s Growing Semiconductor Footprint
While ACM is still a small player globally—holding roughly 8% of the semiconductor-cleaning-tool market—its progress reflects China’s push to expand its domestic semiconductor ecosystem. The U.S. House Select Committee on China warned that Chinese toolmakers are steadily gaining market share, aided by government support and lower pricing. Analysts estimate that ACM’s tools are 20–30% cheaper than those offered by major U.S. competitors like Applied Materials and Lam Research.
As Chinese firms grow more competitive, concerns are mounting about their role in global chip supply chains—especially as the U.S. seeks to maintain its technological edge through subsidies and export controls.
Outlook: A Larger Debate Over Security, Innovation, and Supply Chains
Intel’s evaluation of ACM equipment highlights a broader dilemma facing the U.S. semiconductor sector: the need to balance innovation, cost, and supply-chain resilience while navigating increasingly complex geopolitical tensions. With Congress pushing for stricter regulations and China accelerating its technological ambitions, the debate over how American companies should source their manufacturing tools is likely to intensify.
Both industry leaders and policymakers now face a critical question: how to protect the future of U.S. chip manufacturing without hindering technological progress or global competition.
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