Post by : Saif Rahman

Intel's recent testing of chipmaking equipment from ACM Research has ignited significant concern among officials in Washington. While there's no evidence that Intel has violated any regulations, experts warn about the implications for U.S. national security and the future of the domestic chip industry. These tools, evaluated earlier this year, are aimed at removing thin layers from silicon wafers essential for semiconductor production. Intel assessed them in anticipation of a new chip process, 14A, set for launch in 2027. ACM Research, headquartered in California, maintains a strong presence in China, with two branches in Shanghai and South Korea under U.S. sanctions last year due to allegations of supporting China's military tech advancements. ACM has firmly denied these claims.

This situation has alarmed numerous U.S. national security experts, who caution that using tools associated with China could risk sensitive U.S. technology. There are concerns that these tools could be remotely compromised or sabotaged, endangering chip production in the U.S. Chris McGuire, a former national security official, indicated that the testing highlights gaps in safeguarding American technology. He stressed that U.S. companies should refrain from assisting China in bolstering its chipmaking capabilities, given that advanced semiconductors are pivotal in a variety of technologies, including smartphones and military equipment. ACM has rejected these worries, citing the complete separation of its U.S. operations from its sanctioned Chinese unit, ensuring that all American collaborations are conducted strictly by domestic personnel to protect trade secrets.

The Chinese embassy responded by asserting that commercial relationships should not be politicized, urging U.S. critics to adopt a broader perspective beyond national security. Intel has refrained from commenting on the controversy, but ACM's background explains the intensity of the debate. Founded in 1998 by David Wang, who holds dual U.S. and Chinese residences, he controls a majority of ACM's voting shares. Although the company is officially based in the U.S., its R&D predominantly occurs in Shanghai within an expansive campus located in a high-tech zone. ACM also supplies tools to several Chinese chipmakers, like YMTC and SMIC, that have been scrutinized by U.S. officials for their alleged military connections.

This year, ACM established a facility in Oregon, merely a mile from Intel's primary research site. Analysts suggest that ACM has maintained a collaborative relationship with Intel for years, providing tools for on-site testing and enhancements. ACM claims it is not a primary supplier to large American chip producers, yet its expanding footprint within the U.S. has raised questions about foreign-linked firms' proximity to sensitive technology centers.

Since 2015, China has heavily invested in bolstering its chipmaking industry. Despite still being smaller than its American, Japanese, and European counterparts, Chinese firms are rapidly advancing, with ACM capturing approximately 8% of the global market for chip cleaning instruments. The financial advantage of Chinese tools being 20 to 30 percent cheaper presents concerns for U.S. lawmakers, who worry that American companies may opt for less expensive Chinese options rather than relying on established Western suppliers. This apprehension arises amidst the U.S. government's multi-billion dollar investment to promote domestic chip production through various subsidies and grants. Lawmakers from both sides have reintroduced legislation to prohibit any U.S.-funded chip facility from utilizing Chinese machinery.

The situation mirrors shifts in U.S. policy under President Trump, who has moderated several stringent regulations regarding China, notably greenlighting the sale of certain Nvidia AI chips to the country and relaxing chip export restrictions. These developments have caused uncertainty regarding America’s stance on balancing national security with international business dynamics.

The Intel-ACM scenario underscores the complexities of safeguarding technology in today’s interconnected economy. With substantial government backing, Intel's decisions influence both national security and the chip supply chain globally. Testing tools associated with China might not imply wrongdoing but amplifies the industry's sensitivity. Currently, Intel has yet to clarify whether it will incorporate ACM's tools into its chipmaking initiatives. Nonetheless, the strong reactions from U.S. authorities indicate that this dialogue will persist, as both nations vie for supremacy in advanced technologies, intensifying scrutiny on every partnership, evaluation, and tool.

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