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Intel’s China-linked chip tools test blows open CHIPS Act security fight

Intel’s China-linked chip tools test blows open CHIPS Act security fight

Rule Changes
By Newzino Staff | |

U.S.-backed Intel quietly tried tools from ACM Research, whose sanctioned China units serve SMIC and YMTC, igniting a new battle over what belongs inside America’s showcase fabs.

January 7th, 2026: Tan touts 14A progress at CES 2026, silent on ACM controversy

Overview

Intel is racing to regain its chipmaking crown with a 14A process backed by billions in U.S. subsidies. In mid-December 2025, Reuters revealed the company had been test‑driving critical tools from ACM Research, a China‑rooted equipment maker whose Shanghai and Korean units sit on a U.S. export blacklist. The disclosure pulled a quiet engineering decision into the center of the U.S.–China tech war and deepened scrutiny of CEO Lip‑Bu Tan, whose venture firm invested in ACM years before he joined Intel.

This isn't just about two wet‑etch machines. It's a stress test of the CHIPS Act's guardrails, Washington's willingness to police its own national champions, and whether heavily subsidized Chinese toolmakers that serve sanctioned giants like SMIC and YMTC can slip from powering Beijing's fabs to powering America's most advanced lines. With bipartisan legislation now moving through Congress to ban Chinese tools for a decade and Intel's CEO touting 14A progress at CES 2026 without addressing the controversy, the next few months will determine whether political pressure forces Intel to abandon ACM gear or whether cost and technical arguments prevail.

Key Indicators

140
Entities added to BIS Entity List alongside ACM Shanghai in December 2024
Signals a sweeping tightening of U.S. export controls on China-linked semiconductor firms.
$7.86B
Direct CHIPS funding awarded to Intel, later turned into an equity stake
Gives Washington unprecedented leverage over Intel’s tool choices and security practices.
14%
Share of ACM Research sales attributed to sanctioned foundry SMIC
Shows how deeply ACM’s business is tied to China’s flagship chipmaker.
20–30%
Typical price discount of Chinese chip tools versus Western rivals
Cheaper ACM gear pressures U.S. incumbents and tempts cost‑conscious CHIPS recipients.

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People Involved

Lip-Bu Tan
Lip-Bu Tan
Chief Executive Officer, Intel Corporation (Leading Intel's foundry push at CES 2026 while facing intensifying scrutiny over past ACM investment and current tool evaluation)
David Wang
David Wang
Founder and CEO, ACM Research (Defending ACM after its Shanghai and Korean subsidiaries land on the U.S. Entity List)
Gina Raimondo
Gina Raimondo
U.S. Secretary of Commerce (Overseeing CHIPS Act subsidies and BIS export controls that constrain Chinese chip and tool makers)
Jay Obernolte
Jay Obernolte
U.S. Representative (R‑Calif.), House sponsor of Chinese-tool ban for CHIPS recipients (Co-leading legislation to bar CHIPS-funded fabs from buying Chinese-made chip equipment)
Chris McGuire
Chris McGuire
Former White House NSC official, Council on Foreign Relations senior fellow (Leading public critic of Intel’s use of ACM tools on security grounds)

Organizations Involved

Intel Corporation
Intel Corporation
Semiconductor company
Status: Testing ACM tools for its 14A node at CHIPS-subsidized U.S. fabs while facing political backlash

U.S. chip giant betting its comeback on government-backed fabs and an aggressive 14A manufacturing roadmap.

ACM Research, Inc.
ACM Research, Inc.
Semiconductor equipment maker
Status: U.S.-incorporated, China-centric tool vendor whose Shanghai and Korean units are blacklisted by BIS

California-headquartered but China-focused toolmaker now at the center of a U.S. security storm.

Bureau of Industry and Security (BIS)
Bureau of Industry and Security (BIS)
Federal Agency
Status: Administers export controls and Entity List rules governing ACM and Chinese chipmakers

The export-control gatekeeper deciding which Chinese-linked firms can touch U.S. technology.

CHIPS EQUIP Act (proposed)
CHIPS EQUIP Act (proposed)
Congressional legislation
Status: Bill introduced to bar CHIPS Act recipients from buying Chinese chipmaking tools for ten years

A proposed rule saying CHIPS money and Chinese fab tools can’t mix at U.S. plants.

Timeline

  1. Tan touts 14A progress at CES 2026, silent on ACM controversy

    Corporate Strategy

    Intel CEO Lip-Bu Tan tells CES audience Intel is 'going big time into 14A' and has landed multiple foundry customers, but does not address political firestorm over ACM Research tool testing.

  2. ACM Research stock rebounds 9.4% after Intel controversy

    Market Reaction

    ACM shares rise sharply in first trading days of 2026, signaling investor confidence controversy will not derail U.S. expansion plans.

  3. Intel testing of ACM tools for 14A process becomes public

    Revelation

    Reuters reveals Intel evaluated ACM wet-etch tools despite ACM subsidiaries’ Entity List status, sparking backlash.

  4. ASML named as supplier to Chinese military-linked customer

    Revelation

    Dutch TV alleges ASML gear reached China’s military suppliers, intensifying scrutiny of all toolmakers.

  5. Senate companion to CHIPS EQUIP Act introduced by Kelly and Blackburn

    Legislation

    Senators Mark Kelly (D-AZ) and Marsha Blackburn (R-TN) formally introduce Senate version of bill barring CHIPS recipients from buying Chinese chip tools for ten years, with narrow waivers.

  6. Lawmakers reintroduce tougher Chinese-tool ban for CHIPS recipients

    Legislation

    New bill blocks CHIPS grantees from importing Chinese-made chip equipment to U.S. fabs for decade.

  7. Intel outlines 14A node debut and foundry break-even plan

    Corporate Strategy

    Intel tells investors 14A will enter risk production in 2027, enabling foundry breakeven.

  8. ACM Shanghai and Korea units added to U.S. Entity List

    Regulatory

    BIS blacklists ACM’s China and Korea subsidiaries among 140 firms over military-use concerns.

  9. Intel secures up to $7.86B in CHIPS Act funding

    Funding

    Commerce agrees to fund Intel U.S. fabs, support over $100 billion planned investments.

  10. First bill proposed to block CHIPS-funded fabs from Chinese tools

    Legislation

    Bipartisan proposal would bar CHIPS-funded U.S. fabs from buying equipment tied to adversary states.

  11. ACM opens Hillsboro facility near Intel’s Oregon R&D hub

    Business Move

    ACM launches 11,000-square-foot demo lab in Hillsboro, positioned a mile from Intel.

  12. Biden signs CHIPS and Science Act into law

    Legislation

    New law pledges $39 billion for U.S. chip fabs and builds national security guardrails.

  13. Tan's Walden International invests in ACM Research

    Business Move

    Walden International, venture firm founded and chaired by Lip-Bu Tan, backs ACM Research, creating conflict-of-interest questions when Tan later becomes Intel CEO and Intel tests ACM tools.

Scenarios

1

Congress Locks CHIPS Fabs Out of Any Chinese Tools

Discussed by: Sponsors of the CHIPS EQUIP Act, Reuters coverage, and China-hawk lawmakers in both parties

In this path, the CHIPS EQUIP Act—or a successor—passes with broad bipartisan majorities in 2026. Commerce writes rules that effectively ban CHIPS recipients from installing Chinese-origin tools at U.S. fabs, with only narrow waivers, and Intel quietly shelves any plan to qualify ACM gear for 14A production lines. Existing evaluations are wound down, and procurement tilts decisively toward U.S., Japanese and Dutch vendors. Chinese toolmakers are pushed back into serving primarily China-based fabs, while U.S. taxpayers pay more for a cleaner but costlier supply chain.

2

Intel Limits ACM Tools to R&D as Guardrails Tighten Around Production

Discussed by: Export-control lawyers and industry analysts quoted in trade press and policy forums

Here, political pressure forces Intel to keep ACM tools confined to evaluation labs and non-CHIPS-backed lines, but not to deploy them in high-volume 14A production. Congress waters down or stalls sweeping bans, while BIS issues guidance that doesn’t outlaw all Chinese-origin tools but demands intrusive cybersecurity and supply-chain vetting. Intel keeps ACM as a bargaining chip on price and process ideas, but its flagship fabs in Ohio, Arizona and Oregon standardize on Western suppliers. The message to industry is: experiment if you must, but don’t anchor U.S. capacity on China-linked vendors.

3

Security Probe Finds Serious Vulnerability, Triggering a Broader Crackdown

Discussed by: More speculative scenario floated by national security hawks and some think-tank reports

In the most dramatic case, a U.S. government or independent lab review of ACM tools uncovers either a backdoor risk or a data-leakage vector that intelligence agencies treat as unacceptable. That finding becomes the catalyst for not only banning ACM from CHIPS-funded fabs, but also expanding the Entity List to capture additional affiliates and pushing allies to mirror the move, much as happened with Huawei. Intel is forced to rip and replace any Chinese-origin tools it has installed, at substantial cost and schedule impact, and the precedent spills over into other sectors like EV batteries and industrial equipment.

Historical Context

Huawei and ZTE Telecom Bans and the U.S. ‘Rip-and-Replace’ Program

2019–present

What Happened

Beginning in 2019, U.S. regulators labeled Huawei and ZTE national security threats and barred carriers from using federal subsidies to buy their gear. Congress then funded a "rip‑and‑replace" program requiring rural telecoms to physically remove existing Chinese equipment from their networks.

Outcome

Short Term

Small carriers faced high costs and delays, but Chinese vendors were effectively pushed out of U.S. infrastructure.

Long Term

Huawei became a template for how Washington can first blacklist, then systematically purge Chinese hardware from critical systems.

Why It's Relevant Today

Shows how a security scare over foreign hardware can evolve from subsidy restrictions into outright bans and mandated removal, a trajectory some want to apply to Chinese chip tools.

YMTC and SMIC: Chinese Chip Champions on the Entity List

2020–2025

What Happened

China’s leading memory maker YMTC and foundry SMIC were gradually hit with U.S. export restrictions and Entity List designations over concerns they aided Beijing’s military ambitions. YMTC responded in 2025 by suing the U.S. government over its military-company label, arguing it makes only commercial chips.

Outcome

Short Term

Sanctions cut the firms off from leading-edge U.S. tools and pushed them toward domestic suppliers like ACM.

Long Term

The clampdown accelerated China’s drive to build a self-reliant tool ecosystem, even at the cost of short-term performance.

Why It's Relevant Today

Helps explain why ACM’s biggest growth has been inside a sanctioned Chinese ecosystem—and why U.S. officials fear knowledge may flow back if ACM equipment is validated in Intel’s most advanced fabs.

ASML’s Sales to Chinese Military-Linked Customers

Early 2020s–2025

What Happened

Dutch toolmaker ASML, already under intense U.S. pressure to stop shipping its most advanced lithography machines to China, was reported in 2025 to have sold components to at least one Chinese customer later tied to the military. ASML insisted it complied with all export laws and that the sales were licensed or exempt.

Outcome

Short Term

The revelations fueled political scrutiny in Europe and Washington but did not immediately halt ASML’s broader China business.

Long Term

They reinforced the idea that even trusted Western toolmakers can be drawn into grey zones of military-civil fusion.

Why It's Relevant Today

Underscores that Intel’s ACM bet is part of a wider, messy scramble over where to draw red lines around Chinese customers and suppliers in the semiconductor tool chain.

21 Sources:
+15
Reuters Yahoo Finance / Reuters Devdiscourse ACM Research U.S. Securities and Exchange Commission ACM Research Intel Newsroom Wikipedia Bloomberg / American Journal of Transportation TechPowerUp Senator Mark Kelly House Committee on Science, Space and Technology Tom's Hardware ServeTheHome Reuters Reuters Reuters Wikipedia Reuters Yahoo Finance Tom's Hardware