By Alexandra Alper and Max A. Cherney
WASHINGTON/SAN FRANCISCO, Dec 12 (Reuters) – Chipmaker Intel this year tested chipmaking tools from a manufacturer with deep roots in China and two overseas sites that were targeted by U.S. sanctions, according to two sources with direct knowledge of the matter.
Intel, , obtained the tools from ACM Research, a chip production equipment maker based in Fremont, California.
Two ACM sites, located in Shanghai and South Korea, were among several companies banned last year from receiving U.S. technology on the grounds that they supported the Chinese government’s efforts to use commercial technology for military purposes and to manufacture advanced chips or chip-making tools. ACM denies the accusations.
The two wet etching tools, used to remove material from silicon wafers that are turned into semiconductors, were tested for possible use in Intel’s most advanced chip manufacturing process, known as 14A. The initial launch of this process is scheduled for 2027.
Reuters was unable to determine whether Intel had decided to add the tools to the chipmaking process and has no evidence that the company violated any U.S. regulations. ACM said it could not comment on ‘specific customer contracts’, but confirmed that ‘ACMR’s US team has sold and delivered a number of tools from our Asian operations to domestic customers’.
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The company also reported that it had sent three tools to a ‘major US-based semiconductor manufacturer’, which are being tested and some have already met performance standards.
But the fact that Intel, which is now owned by the U.S. government, would consider adding tools made by a company with sanctioned units to its most advanced production line raises important national security concerns, China critics said. They highlighted the possible transfer of sensitive technological knowledge from Intel to China, the eventual replacement of Western suppliers of trusted tools with companies linked to China, and even the potential for sabotage efforts by Beijing.
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Faced with Beijing’s imposition of export controls on rare earth minerals, US President Donald Trump backed away from most hardline policies on chip exports to China and on Monday gave the green light for Nvidia to sell its second most advanced AI chip in China.
But as Chinese toolmakers begin to enter the global market, concern is growing among lawmakers of both parties, who earlier this month reintroduced a bill to prevent chipmakers who have received billions in subsidies from the U.S. government from using Chinese equipment as part of their government-backed expansion plans.
Intel’s testing of ACM tools ‘highlights glaring gaps in US technology protection policies and should not be allowed,’ said Chris McGuire, a former White House National Security Council official under US President Joe Biden and a senior fellow at the Council on Foreign Relations, in response to Reuters’ findings.
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‘Chinese tools can easily be manipulated remotely or physically by Beijing to degrade or even disrupt US chip production. And US companies should not participate in improving China’s chipmaking tools, which are the foundation of all advanced technology development,’ he added.
ACM stated that it does not pose a threat to national security, noting that its U.S. operations are “bifurcated and isolated” from the sanctioned Shanghai-based unit, and that U.S. customers receive direct support from U.S. personnel, with strong safeguards to protect customers’ trade secrets.
The Chinese embassy in Washington did not address the specific concerns cited by China’s critics, but stated: ‘Normal trade and economic cooperation between companies should not be politicized. We urge certain individuals in the US to abandon their ideological prejudices and stop generalizing the concept of national security.’
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ACM Research was founded in 1998 by David Wang, who still serves as chief executive and owns more than 57% of the company’s voting shares. The ACM’s Chinese website lists Wang as a U.S. citizen with permanent residence in China.
ACM also sells equipment to Chinese chipmaker YMTC, which is under sanctions, as well as CXMT, also from China, which has been cited by the Department of Defense as a company backed by the Chinese military, according to a recent presentation on its website. SMIC, another ACM client targeted by US sanctions for alleged ties to the Chinese military industrial complex, represents 14% of ACM’s sales, according to the company.
Although the company’s headquarters are located in California, most of its research and development takes place in China, where ACM established its Shanghai R&D center in 2006, according to a May 2025 investor presentation.
“ACM now has full R&D, engineering and manufacturing operations at its facilities in the Zhangjiang High-Tech Park in Shanghai, China,” the ACM website states.
In November 2023, ACM announced the opening of a new facility in Hillsboro, Oregon – an area dubbed the State’s ‘Silicon Forest’ – ‘strategically located near key customers and partners’ to serve as the company’s new sales and service center.
The building is about a mile from Intel’s main R&D and early chip production plant, and there are no other high-end chip factories in the state.
A January report from US hedge fund Kerrisdale Capital stated that the installation was intended to support ACM’s relationship with Intel, noting that ACM qualified a new tool there in late 2023 and delivered additional tools in mid-2024.
Intel did not respond to a request for comment. ACM said it is not a significant equipment supplier to any major U.S. chipmaker.
(Additional reporting by Eduardo Baptista, Pan Che and Stephen Nellis)
