On Wednesday, March 4th, a bipartisan group of US lawmakers led by Democratic Senator Elizabeth Warren and Republican Senator Tom Cotton raised national security concerns regarding the testing of “Shengmei Semiconductor” chip manufacturing equipment by ACM Research, a company with Chinese ties, owned by Intel.
ACM Research, a chip equipment manufacturer based in California, with approximately 2,500 employees worldwide, primarily focuses its research, production, and workforce in Shanghai, China. It is widely seen as a company that was founded in Silicon Valley but has grown significantly in China. Lawmakers questioned whether ACM might disclose sensitive information to the Chinese government or its clients.
The Shanghai and South Korean subsidiaries of ACM are currently on the US Department of Commerce’s Entity List for allegedly assisting the Chinese government in converting commercial technology for military use or participating in the manufacture of advanced chips and equipment for China. However, ACM denies these allegations and claims that its US operations are independent.
ACM’s major clients, including YMTC, SMIC, and CXMT, have close ties to China and have even helped Huawei evade US sanctions. Huawei, YMTC, and SMIC are currently on the US Entity List.
To further prevent vulnerabilities, the US government issued the proposed rule “FAR Case 2023-008” on February 17th, in line with the 2023 National Defense Authorization Act, prohibiting federal agencies from purchasing products or services from companies associated with YMTC, SMIC, CXMT, and their subsidiaries. This ban is expected to take effect on December 23, 2027.
In a letter to Intel CEO Lip-Bu Tan on March 4th, US lawmakers expressed concerns that allowing ACM to operate in Intel facilities may expose it to cutting-edge chip manufacturing technologies, potentially boosting ACM’s technical quality and competitiveness in collaboration with the Chinese military.
In response, Intel stated that ACM’s equipment has not been used in Intel’s semiconductor production processes and emphasized its compliance with US laws and regular communication with the US government on security matters.
As of now, ACM has not responded to Reuters’ report. However, ACM previously mentioned that it cannot comment on “specific customer collaborations” but disclosed that three equipment have been shipped to a “major US semiconductor manufacturer” for testing, and some have met performance standards.
ACM has repeatedly claimed that it does not pose a national security threat to the US and highlighted the isolation of its US operations from the sanctioned Shanghai branch. Moreover, the company stated that US customers receive direct support from American personnel with strict security measures to protect commercial secrets.
The Chinese Embassy in the US did not immediately respond to Reuters’ inquiries.
Signatories of the letter include Democratic lawmakers Elissa Slotkin and Andy Kim, as well as Republican lawmakers Jim Banks and Pete Ricketts. This underscores bipartisan congressional concerns about the role of China in the US semiconductor manufacturing industry.
The US House Select Committee on the CCP has previously expressed concerns about ACM’s semiconductor manufacturing equipment operations in the US semiconductor industry. The semiconductor manufacturer has been officially certified, allowing the use of ACM’s equipment on production lines.
Lawmakers specifically pointed out in the letter that Intel has a unique responsibility as the US government currently holds shares in Intel. In August last year, former US President Trump questioned the close relationship between Intel’s CEO and China and suggested resignation.
Furthermore, legislators warned in the letter that “Intel has a responsibility to uphold the public interest, including how it contributes to the US economic interests and benefits taxpayers. Now with Intel entangled with blacklisted Chinese companies, one cannot help but question whether taxpayer money is subsidizing activities that directly threaten US national security and semiconductor leadership.”
(Source: Reuters)