Intel Tests Chipmaking Tools Linked to China, Sparks Security Fears

Intel (INTC) has reportedly tested chipmaking equipment this year from ACM Research (ACMR), a Fremont, California-based supplier, according to two sources cited by Reuters. Two ACM units, based in Shanghai and South Korea, were added to the U.S. Entity List in 2024 over allegations of aiding China's military use of commercial technology and advanced chip production. However, ACM denies the claims.Claim 50% Off TipRanks Premium and Invest with Confidence Unlock hedge-fund level data and powerful investing tools designed to help you make smarter, sharper decisions Stay ahead of the market with the latest news and analysis so your portfolio is always positioned for maximum potential Potential Risks from Intel's Supply Choices Intel previously faced calls for CEO Lip-Bu Tan's resignation over alleged China ties from President Donald Trump in August. Intel tested two wet-etch tools, used for removing material from the silicon wafers that are transformed into semiconductors, for possible use in its most advanced chipmaking process, known as 14A. That process is due for an initial launch in 2027. ACM declined to comment on specific customers but confirmed its U.S. team sold and delivered multiple tools from Asian operations to U.S. clients. ACM also disclosed shipping three tools to a major U.S. semiconductor maker, which are being tested and some of which have met performance standards. Intel's Tests Raise Security Concerns The tests have drawn scrutiny from China hawks, especially now that Intel is partly owned by the U.S. government. Critics warn of tech leaks to China, replacing trusted suppliers, and sabotage risks as Chinese toolmakers expand globally. Bipartisan lawmakers recently reintroduced a bill to bar U.S.-subsidized chipmakers from using Chinese equipment in expansions. In defense, ACM stated that it poses no national security risk and emphasized its U.S. operations are "bifurcated and isolated" from the sanctioned Shanghai unit. U.S. customers receive direct support from American staff with strong protections for trade secrets. Is INTC Stock a Buy, Hold, or Sell? Analysts remain cautious about Intel's long-term outlook. On TipRanks, INTC stock has a Hold consensus rating based on five Buys, 24 Holds, and six Sell ratings. The average Intel price target of $37.04 implies 6.3% downside potential from current levels. Year-to-date, INTC shares have surged nearly 97%.