Two sources told Reuters that Intel tested ACM’s wet-etch tools earlier this year to determine their viability for the upcoming 14A node. These tools are critical in cleaning and etching silicon wafers during advanced manufacturing.
Intel, now partly government-owned under the CHIPS Act subsidies, faces scrutiny over why it would even consider tools from a company whose overseas divisions are accused of supporting Beijing’s military technology efforts.
Intel declined to confirm the testing but said it complies with all US regulations. ACM acknowledged deliveries of several tools to US chipmakers but denied posing any national security risk, stressing that its US operations are “bifurcated and isolated” from its Shanghai branch.
China Ties Run Deep
Founded in 1998 by David Wang, who holds both American citizenship and Chinese permanent residence, ACM conducts most of its research and development in China.
Its clients include SMIC, YMTC, and CXMT, all companies flagged by Washington for military affiliations. According to ACM’s own filings, SMIC alone accounts for 14% of its total sales.
In 2023, ACM opened a new facility in Hillsboro, Oregon, just a mile from Intel’s flagship R&D plant. A hedge fund report by Kerrisdale Capital suggested the facility was built primarily to strengthen ACM’s relationship with Intel, noting multiple tool qualifications and deliveries since 2023.
Washington’s Security Alarm
China hawks in Washington reacted sharply to the revelation. Chris McGuire, former National Security Council official, warned:
“Chinese tools could easily be remotely or physically manipulated by Beijing to degrade or even halt US chip production. US firms should play no part in helping China improve its chipmaking tools.”
Lawmakers from both parties have already reintroduced legislation that would ban subsidized US chipmakers from using Chinese equipment in government-backed expansion projects.
The Chinese embassy dismissed the backlash, saying, “Normal trade and economic cooperation between companies should not be politicized.”
Strategic Stakes
ACM remains a small player globally, with just an 8% share of the cleaning-tool market, but its ambitions are rising fast. Chinese toolmakers have been expanding their global footprint since 2015, and US policymakers fear that their entry into American fabs could undermine national resilience in chip manufacturing.
For Intel, already under pressure after President Trump publicly questioned CEO Pat Gelsinger’s China ties, the optics could hardly be worse.
With national security, supply chains, and geopolitics colliding, the world’s most advanced chip race may now depend on where Intel draws the line.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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