Intel may again face 'Chinese problem', and tough one

Intel is reportedly testing chipmaking equipment from ACM Research, a US firm with units previously targeted by US sanctions over alleged ties to China's military. This move, involving tools for Intel's critical 14A process, raises national security questions, especially as Intel is partially US government-owned. ACM denies wrongdoing, stating its US operations are separate.
Intel is reportedly testing chipmaking equipment from ACM Research, a US firm with units previously targeted by US sanctions over alleged ties to China's military. This move, involving tools for Intel's critical 14A process, raises national security questions, especially as Intel is partially US government-owned. ACM denies wrongdoing, stating its US operations are separate.
Intel is reportedly testing crucial chipmaking equipment from a company with close ties to China. According to a report by the news agency Reuters, Intel tested chipmaking tools from a company in 2025 that owns two overseas units that were targeted by US sanctions. The report cited two sources with direct knowledge of the matter to claim that the tools Intel tested were acquired from ACM Research, a US-based manufacturer of chipmaking tools. In 2024, two ACM units in Shanghai and South Korea were blocked from obtaining US technology because they were accused of supporting China with commercial technology for military purposes and of making advanced chips or chip-making tools. However, ACM has denied these claims. Reuters couldn't confirm whether Intel had decided to use the tools in its advanced chip-making process. The agency doesn’t even have any proof on the company broke any US regulations.
Why this may be a problem for Intel
The two wet-etch tools used to remove material from silicon wafers during the semiconductor manufacturing process were assessed for compatibility with Intel’s critically important 14A manufacturing process, scheduled to roll out in 2027. Intel is now partially owned by the US government. The fact that the company would consider using tools made by a company with sanctioned units in its most advanced manufacturing facilities has raised national security questions. This 14A chip manufacturing process, is seen as Intel’s make-or-break effort in the foundry business. Earlier, the company suggested it may delay or even cancel the 14A node if it fails to secure at least one large external customer. Adding to the complexity, Walden International, a venture capital firm founded and chaired by Intel CEO Lip Bu Tan, invested in ACM Research in 2019. However, ACM told Reuters that it couldn't discuss “specific customer engagements,” but confirmed that “ACMR's US team has sold and delivered multiple tools from our Asian operations to domestic customers.” The company also said it has shipped three tools to a “major US-based semiconductor manufacturer,” which are being tested and some of which have passed performance tests. Also, in its Q2 2025 earnings results from August, the company wrote: “We are making important strides in our global expansion efforts, with several tool deliveries planned to the US during the third quarter.” ACM also told Reuters it does not present a national security risk. The company explained that its US operations are “bifurcated and isolated” from the sanctioned Shanghai unit. The company added that US customers are served directly by American staff with strong protections in place to safeguard customer trade secrets. Etch systems remove materials from silicon wafers in chip manufacturing. Wet etch uses liquid chemicals for selective cleaning but removes material in all directions, potentially widening features. Dry etch uses ionised gases for precise, directional removal but is more complex. Modern chipmaking factories use both methods. Other companies producing these tools include Applied Materials, KLA, Lam Research, and Tokyo Electron. Tools from ACM and Chinese competitors are 20% to 30% cheaper than those from rivals like Applied Materials and Lam, according to Dan Hutcheson, Vice Chair of TechInsights Inc. This creates downward price pressure on established competitors. Testing equipment from different suppliers is standard practice for all chipmakers but Intel's consideration of ACM Research equipment raises concerns due to the company's connections to sanctioned Chinese operations.
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