Intel’s Use of Tools from Sanctioned China-Linked Firm Sparks National Security Concerns

Economic

Summary:

Intel has tested chipmaking equipment from ACM Research, a U.S.-based firm with deep operations in China and sanctioned overseas units, raising alarms over potential national security vulnerabilities despite no proven regulatory breach....

Intel’s Quiet Engagement with ACM Raises Regulatory Red Flags

Intel, a pillar of America’s semiconductor ambitions and partially government-backed, has reportedly tested advanced chipmaking tools this year from ACM Research a company whose two overseas units, in Shanghai and South Korea, are subject to U.S. sanctions. The equipment in question, known as "wet etch tools," is used to clean and remove layers on silicon wafers and is considered critical in advanced semiconductor manufacturing. These tools were reportedly evaluated for Intel’s future 14A process, a cutting-edge chip fabrication platform scheduled for a 2027 debut.

Although Intel's use of the tools does not appear to breach existing regulations, the association with a firm whose Chinese unit is restricted due to military-related concerns has rekindled anxiety among U.S. national security analysts and lawmakers. The central issue lies not only in the testing of the tools, but in the possibility that proprietary U.S. technology could be indirectly exposed or that ACM's products could be manipulated to compromise chip production.

Sanctions, Executive Scrutiny, and Strategic Ambiguity

The situation comes months after President Donald Trump publicly criticized Intel’s CEO amid broader concerns over China’s rising influence in the global chip supply chain. While Trump recently softened some of his chip export restrictions allowing Nvidia to resume sales of certain AI chips to China his administration, along with bipartisan lawmakers, continues to view Chinese toolmakers with suspicion.

Recent legislative efforts aim to restrict the use of Chinese-made chip tools by any company benefiting from billions in U.S. semiconductor subsidies. Intel’s move to evaluate tools from ACM, despite their links to Chinese military-supported firms like SMIC and YMTC, appears to run counter to the spirit of these efforts even if it technically remains within legal boundaries.

Chris McGuire, a former National Security Council official, emphasized the strategic risk: Chinese-linked tools could be manipulated remotely, potentially threatening U.S. chip supply chains or enabling Beijing to siphon off technological know-how. ACM counters this by asserting that its U.S. operations are completely segregated from its sanctioned Chinese units and that customer data is safeguarded under stringent internal protocols.

Deep China Ties Despite U.S. Headquarters

ACM Research was founded by David Wang, a U.S. citizen with Chinese permanent residence, who still holds majority voting control. Although headquartered in Fremont, California, the firm’s R&D operations are predominantly located in Shanghai. Its clientele includes multiple Chinese firms already under U.S. sanctions, including YMTC, CXMT, and SMIC entities tied to China’s military-industrial ambitions.

These associations have caught the attention of U.S. regulators. The House Select Committee on China flagged ACM in a 2025 report for allegedly supplying semiconductor manufacturing equipment to a U.S.-based firm, suspected to be Intel, and formally certifying it for production use. Such interactions, even if legal, may enable backdoor support for China’s semiconductor ambitions through indirect technology transfers.

ACM’s Expansion in the U.S. Raises Strategic Eyebrows

Adding to the concerns is ACM’s 2023 opening of a facility in Hillsboro, Oregon just a mile from Intel’s premier R&D and fabrication plant. This “Silicon Forest” presence has reportedly facilitated direct engagement with Intel, with tool evaluations underway and further integration anticipated in 2026. Hedge fund Kerrisdale Capital reports that ACM is tailoring its Oregon facility to allow Intel to test wafers directly, suggesting a closer relationship than either company publicly acknowledges.

Despite ACM’s claim that it is not a significant supplier to any U.S. chipmaker, industry sources indicate otherwise. Kerrisdale highlights “active tool evaluations” and notes that ACM’s U.S. lab upgrades were designed to deepen collaboration with Intel though whether this translates into full adoption remains unknown.

Geopolitical Pressures and Market Dynamics Collide

The broader context includes Beijing’s strategic push to dominate semiconductor manufacturing and reduce dependence on Western suppliers. ACM has grown its global market share in cleaning tools to 8%, per Gartner, and offers prices 20%–30% lower than Western competitors such as Applied Materials and Lam Research. This cost advantage, if sustained, may tempt even subsidy-backed U.S. firms to explore such options, further complicating Washington’s goal of decoupling critical technologies from Chinese influence.

Moreover, as Chinese toolmakers make competitive gains, Washington risks a two-front dilemma: enforcing national security measures while maintaining competitiveness in a highly globalized industry. Intel’s exploratory engagement with ACM may therefore be more symptomatic of industry cost pressures and innovation demands than political intent but it still underscores the fragility of national tech safeguards.

Intel’s ACM Engagement Highlights Systemic Vulnerability

Intel’s testing of ACM tools, though not illegal, exposes persistent gaps in U.S. tech protection frameworks. The incident illustrates how globalized supply chains allow even firms under partial government ownership to brush up against sanctioned entities without regulatory fallout. While ACM insists its U.S. operations are independent and secure, the geopolitical implications particularly given ACM’s deep China ties suggest a need for more coherent, forward-looking policies.

The causal link between China’s growing technological footprint and U.S. national security anxiety is evident. As Chinese toolmakers inch closer to parity, their presence in Western fabs, even indirectly, becomes a flashpoint. For Intel and its peers, the challenge now is to navigate rising cost and innovation demands without compromising strategic autonomy something current U.S. policy still struggles to enforce with clarity.

Source: Reuters

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FXOpen

Forex

Commodity

On 27 November, we suggested that silver was preparing to challenge its all-time high. Since then (marked with the orange arrow), XAG/USD has risen by roughly 18%, breaking above the psychological $60-per-ounce threshold for the first time in history.

The rally has been driven by strong retail inflows into silver ETFs, alongside expectations of a structural supply deficit by 2026 due to robust industrial demand—particularly from solar energy, electric vehicles, and data-centre infrastructure.

The weakening of the US dollar following the Federal Reserve's decision on Wednesday also helped lift dollar-denominated silver to a new historic peak near $64.

Technical Analysis of XAG/USD

A review of the XAG/USD chart shows that the price has been moving within a rising channel that encapsulates the uptrend beginning in early September.

Within this structure:→ the channel median acted as a springboard for price growth on 4 December;→ the line dividing the upper half of the channel into quarters switched from resistance (earlier in the month) to support on 10 December;→ silver is now trading near the channel's upper boundary, which may behave as significant resistance (as it did in mid-October).

Given these factors, the market may now be heavily overheated, leaving it vulnerable to a correction. Should this scenario begin to unfold, we could see a bearish break of the steep upward trajectory that has lifted silver by around 30% from the 21 November low.

Source: FXOpen

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IC Markets

Forex

Stocks

US Stocks Mixed After Fed – Dow up 1.3%

US equity markets were mixed overnight as investors continued to weigh the implications of the Fed's latest rate cut. The Dow led the way, jumping 1.34% to finish at 48,704, while the S&P 500 managed a modest 0.21% rise to 6,901, both securing fresh record closes. The Nasdaq, however, slipped 0.25% to 23,593 after tech heavyweight Oracle issued a weaker-than-expected forecast, reigniting concerns that parts of the AI sector may be running ahead of fundamentals.

In FX, the US dollar softened again, with the DXY easing 0.29% to 98.34, even as Treasury yields edged higher. The 2-year yield nudged up 0.3 bps to 3.541%, while the 10-year added 1 bp to 4.157%. Oil extended its recent decline, with Brent slipping 0.96% to $61.62 and WTI down 0.91% to $57.93, as markets drew optimism from renewed hopes for progress toward a Ukraine peace deal. Gold rallied strongly, climbing 1.06% to $4,278.85, supported by haven flows and momentum following yesterday's Fed decision.

Investor Glasses Still Half Full for Christmas Drinks

Major US indices pushed higher in trading yesterday to hit fresh all-time high closes as investors continued to cheer the Fed's interest rate cut on Wednesday and advice that we will see at least one more in 2026. The Dow and S&P hit records, while the Nasdaq fell marginally, which wasn't a bad result given an 11% drop for Oracle.

The market seems to be driving forward into the year-end with the same 'glass half full' mentality that has carried it to records in 2025, and investors are happy to jump on that bandwagon. However, there are some that fear a significant early-2026 hangover could be coming their way, with growth tech firms involved in AI looking to be the highest risk for some sharp corrections in the current environment – as we saw with Oracle yesterday. In addition to those fears, the Fed left plenty of wiggle room for hawks out there as well, despite the market's initial reaction to Wednesday's cut – so for now, investors are happy to eat, drink, and be merry while the good times last, but are wary that things can sometimes look different in the cold light of a fresh new day – or fresh new year!

Markets Strong into the Weekend

With the macro calendar far quieter today, traders may still see swings across markets as they continue to digest the heavy run of central bank updates and geopolitical developments from earlier in the week. The Asian session is expected to have a relatively quiet start to the day; however, with products trading at significant levels, traders are expecting things to liven up as the day progresses.

The European session sees the release of the only tier 1 data of the day, with the UK GDP numbers due out. The month-on-month figure is expected to show just a 0.1% increase, and any deviation from this will see big moves in the pound, anything lower likely to put more pressure on the Bank of England ahead of next week's interest rate call. There is little on the calendar in the New York session today, which should see smoother trading conditions; however, as above, with indices at all-time highs and the Fed update still fresh in investors' minds, most traders are expecting another lively session.

Source: IC Markets

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Gerik

Economic

Local Confidence Anchors Taiwan's Market Amid Global Skepticism

As global markets begin to exhibit caution toward artificial intelligence stocks, Taiwan’s domestic investors are charging ahead, undeterred by the fear of an AI valuation bubble. The island’s benchmark stock index is on track to breach the symbolic 30,000-point mark in early 2026, having nearly doubled over the past three years. This optimism is rooted not just in speculation, but in Taiwan’s strategic position as the nucleus of the global semiconductor ecosystem powering the AI revolution.

Despite net foreign outflows exceeding NT$533.8 billion (approximately $17 billion) in 2025 alone, the market remains resilient. Local investors appear more focused on long-term structural fundamentals than on short-term volatility or macroeconomic noise. This divergence in sentiment reflects a deeper belief that Taiwan’s supply-side advantages give it a unique buffer against AI market volatility.

Semiconductors Secure Taiwan’s Central Role in AI Evolution

Concerns about Nvidia’s future market dominance have surfaced globally as Google’s custom TPUs threaten to undercut GPU pricing. However, Taiwan benefits either way. As the foundational base for both Nvidia’s GPUs and Google’s TPUs, Taiwan stands to gain from rising demand regardless of who leads the AI hardware race.

TSMC, the world’s largest contract chip manufacturer, sits at the heart of this hardware production cycle, along with AI-aligned firms like Foxconn, Elite Material, and other upstream suppliers. Analysts argue that the strength of Taiwan’s order books and the pace of innovation in high-end chips will keep revenue momentum intact well into 2027.

Goldman Sachs projects that hyperscaler investment globally will grow to $552 billion in 2026 and $644 billion in 2027, which further reinforces the long-term outlook for hardware demand. Gina Kim of Nordea Asset Management also emphasizes that Taiwan’s role in AI and advanced semiconductors remains “structurally intact,” suggesting persistent upside potential.

No Bubble in Sight, Say Analysts and Fund Managers

Unlike the speculative fervor that marked the dot-com boom, Taiwan’s AI-linked stocks are supported by real earnings and competitive business models. The market’s current price-to-earnings (P/E) ratio stands at a relatively moderate 21, lower than both the Nasdaq and Japan’s Nikkei, indicating that despite soaring valuations, Taiwan’s market isn’t detached from corporate fundamentals.

Li Fang-kuo, head of Uni-President’s securities investment division, dismisses bubble fears, arguing that companies like Nvidia and other “magnificent seven” names enjoy gross margins of 70% or more figures that are not remotely comparable to the revenue-less companies of the early 2000s.

This sentiment is echoed by Goldman Sachs, whose strategists maintain an overweight position on tech and AI shares, stating that the current cycle, while frothy in appearance, does not yet meet the criteria of a speculative bubble.

Foreign Sell-Off Contrasts With Strong Domestic Accumulation

While foreign investors have continued to reduce their exposure driven by concerns about trade tensions, AI profit sustainability, and a desire to lock in gains domestic capital has filled the vacuum. Analysts attribute this divergence not to opposing market views, but to different time horizons and risk tolerances.

Foreign investors, often guided by macro-hedging strategies, have been more reactive to rising tensions with Beijing and broader geopolitical instability. Yet these same issues appear to have less influence on local institutions and retail investors, who instead focus on Taiwan’s entrenched role in global tech supply chains.

HSBC strategists recently noted that the average Asian portfolio contains a 10% allocation to a single stock TSMC highlighting both concentration risk and the confidence investors place in Taiwan’s leading position.

Taiwan’s Strategic Position Shields It From AI Volatility

While the rest of the world debates whether the AI boom has morphed into a bubble, Taiwan's domestic investors are doubling down. They are buoyed by a clear structural advantage: the island's indispensable role in manufacturing the core hardware powering the global AI transition.

The market’s upward trajectory, backed by robust earnings and manageable valuations, presents a contrast to the overheated conditions that typically precede a bubble burst. As long as capital expenditure in AI infrastructure continues to rise, and Taiwan maintains its dominance in advanced semiconductors, the rally appears far from over regardless of who leads the AI race.

Even with foreign capital fleeing and geopolitical risks looming, Taiwan's market narrative remains internally driven, structurally resilient, and fundamentally optimistic. The island’s near-future market prospects will likely be shaped less by fears of overvaluation and more by the durable demand for the silicon foundation of tomorrow’s intelligent machines.

Source: Reuters

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Glendon

Forex

Economic

The U.K. economy unexpectedly remained in contraction in October, with uncertainty ahead of the Autumn budget by Chancellor Rachel Reeves likely curtailing growth.

Data released earlier Friday by the Office for National Statistics showed that U.K. gross domestic product fell by 0.1% on a monthly basis in October, matching the drop seen during the prior month and below the 0.1% growth expected.

On an annual basis, the U.K. economy expanded by 1.1% in October, matching the growth seen the previous month and below the 1.4% growth expected

The manufacturing sector reported growth of 0.5% in October, rebounding from the hefty 1.7% drop the previous month, boosted by the restart of operations at Jaguar Land Rover's factories early in the month, after a cyber attack.

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The uncertainty surrounding the Autumn budget, delivered by U.K. finance minister Rachel Reeves in November, likely deterred businesses and consumers alike from making investment decisions.

In the end, Reeves did raise taxes to give her greater room to meet her deficit-reduction targets as well as fund higher welfare spending, but not by as much as had been feared.

As a result, the Confederation of British Industry earlier Friday lifted up its economic growth forecast for next year, citing a temporary boost to government spending following the budget.

The business association predicted the U.K. economy will grow 1.3% next year, up from its previous forecast of 1.0% in June, and also lifted its forecast for this year to 1.4% from 1.2%, reflecting upward revisions to recent official data.

"While it's welcome to see our growth forecast upgraded for next year, the mood music reads more 'cautious optimism' than 'cause for celebration'," CBI chief economist Louise Hellem said.

The Bank of England holds its final policy-setting meeting of the year next week, and is widely expected to cut interest rates by a quarter point to 3.75% as recent data has shown inflation drifting lower.

British inflation fell in October for the first time since May, to 3.6% from 3.8%, in line with the central bank's expectations, and November data due next week could show a further drift downwards.

The BOE held interest rates unchanged at 4.0% in November, but this was a close call with four out of the nine policymakers voting for a rate reduction.

Source: Investing

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Gerik

Economic

A High-Priced Path to Citizenship for the Global Elite

President Donald Trump has launched the “Trump Gold Card,” a controversial new immigration initiative offering wealthy individuals and corporations expedited U.S. permanent residency and eventually citizenship through large, nonrefundable contributions. For individuals, a $1 million donation and a $15,000 processing fee grant access to EB-1 or EB-2 visa tracks. Corporations may sponsor employees for $2 million under the “Corporate Gold Card,” with additional fees and optional transfer rights.

Applications for both programs opened December 10, following a September executive order. Trump claims the program will raise “billions” for the U.S. Treasury, helping fund government initiatives and strengthening the economy. The Trump administration has framed the move as a way to “bring in the best,” emphasizing elite talent and global capital over broader immigration access.

Legal Ambiguities Undermine Policy Certainty

Despite its high-profile rollout, legal experts argue that the program’s foundation remains shaky. Unlike the EB-5 investor visa program, which is grounded in federal statute and requires job creation, the Gold Card relies entirely on an executive order without congressional approval. This raises key concerns about its legality and long-term enforceability.

Immigration attorney Natalia Polukhtin notes that the program circumvents legislative processes by carving out space within existing visa categories EB-1A for individuals with “extraordinary ability” and EB-2-NIW for those who benefit the national interest without formally amending immigration law. The lack of statutory basis could expose the program to future legal challenges or rollback under a different administration.

Additionally, unlike EB-5, which mandates targeted investments and job creation, the Gold Card requires no specific business placement or employment contribution. The $1 million “donation” is not a capital investment; rather, it is an unstructured payment to the federal government, raising further doubts about whether it aligns with established immigration frameworks.

Dubious Economic Returns Raise Cost-Efficiency Questions

Trump has promoted the Gold Card program as a tool to “build the greatest economy on earth,” but economists remain unconvinced that this visa model will deliver measurable benefits to the U.S. economy. While capital inflows may increase federal revenue, research suggests such schemes typically have only marginal effects especially in large economies like the United States.

Nuri Katz, founder of Apex Capital Partners, points out that the EB-5 program already draws around 4,000 applications annually at a lower cost threshold of $800,000. Even if that number were to migrate to the Gold Card’s $1 million price tag, the Treasury’s gain would hover around $4 billion per year barely registering in the context of the federal budget or national debt.

An IMF study on global citizenship-by-investment programs further suggests that while they may temporarily boost revenue in small countries, they are often associated with real estate price inflation and fail to generate long-term economic gains. In such countries, property markets inflated by investor inflows saw prices rise by up to 3% within a year raising concerns about speculative pressures on urban housing if the Gold Card were widely adopted.

Moreover, the lack of any job creation or economic multiplier requirement limits the program’s capacity to generate productivity or industrial benefits. From an economic standpoint, the Trump Gold Card functions more like a fundraising tool than an investment visa.

Corporate Gold Cards and Transferable Access Raise Ethical Flags

The program’s corporate version adds another layer of complexity. For $2 million, a company can sponsor an employee’s permanent residency with the option to transfer the benefit to another employee for a 5% fee. This raises ethical concerns about the commodification of immigration status and the potential for large firms to use visas as strategic leverage within global talent markets.

Additionally, the 1% annual maintenance fee for approved corporate cardholders introduces an ongoing cost that might be bearable for multinationals but could skew competition by pricing out smaller firms or startups. The ability to transfer immigration sponsorship for a fee, critics argue, turns visa access into a marketable asset rather than a merit-based selection.

High-Profile Rollout, Unclear Impact

The Trump Gold Card offers a flashy new avenue for elite immigration but faces serious scrutiny on legal, ethical, and economic grounds. The lack of congressional authorization, absence of job-creation obligations, and reliance on nonrefundable donations rather than investments all distinguish it from established immigration models like the EB-5.

While the program may succeed in raising capital from a narrow group of global elites, its broader utility for the U.S. economy remains questionable. It risks undermining the coherence of immigration policy by privileging wealth without guaranteeing public benefit, potentially triggering legal resistance and further polarization of immigration reform debates.

In short, the Trump Gold Card symbolizes a policy pivot toward transactional citizenship but without robust legal grounding or economic returns, its legacy may be more political than practical.

Source: Reuters

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Westpac

Political

Central Bank

Economic

The RBA's decision to leave the cash rate unchanged came as no surprise to the market, but the focus was always going to be on the RBA's take on the recent dataflow.

In the event, the Monetary Policy Board conceded that part of the recent lift in underlying inflation "may be persistent", but also that some was due to "temporary factors". On activity, "private demand has strengthened, driven by both consumption and investment", and, if it were to persist, would "likely add to capacity pressures". Though the "risks to inflation have tilted to the upside" in the RBA's view, they do not appear to be in any rush to pre-emptively react to these risks, noting that "it will take a little longer to assess the persistence of inflationary pressures."

Underlying the RBA's assessment on the balance of risks is a somewhat more pessimistic view on supply capacity which, in the context of an economic upswing, begets a more hawkish tone around the inflation outlook. Our view on productivity, population and participation is more constructive, implying that the economy can handle a higher rate of growth without sparking excessive inflation. As temporary factors wash out, inflation should resume its trajectory toward the mid-point of the target range, providing scope to deliver two more rate cuts next year. If inflation dynamics take longer to normalise, the risk is that the cash rate could remain on hold for longer than our current base case.

Developments around the labour market will also be key for policy hence. The data continues to speak to a gradual softening as jobs growth across broad industry segments normalises. The November update revealed a decline in employment (–21.3k) which was 'cushioned' by an unexpected fall in the participation rate, resulting in the unemployment rate holding steady at 4.3%. We expect a bit more slack to open up over the next year, putting a lid on any upside risks to inflation stemming from the labour market.

Before moving offshore, a final note on business. The latest NAB business survey indicated that business conditions remained positive and generally steady around long-run average levels in November, notwithstanding a small decline. Business confidence was a little shakier in the month, but a more constructive picture around forward orders has allowed businesses to remain cautiously optimistic. As evidence of a sustained recovery continues to build, businesses will be able to expand capacity with a greater degree of confidence.

In the US, the FOMC cut the fed funds rate by 25bps to 3.625% at their December meeting but maintained its projection of only one further cut in 2026 and another in 2027, reaching a broadly neutral rate of 3.125% by end-2027. This cautious approach reflects expectations of above-trend growth through 2028, supported by real income gains and AI-driven infrastructure investment, seeing the unemployment rate ease back to 4.2%.

Inflation is only forecast to decline gradually from 3.0% in 2025 to 2.0% by 2028, implying moderately restrictive policy will achieve the dual mandate, eventually. We anticipate capacity constraints and persistent inflation risks will limit further easing by the FOMC to just one more cut, which is most likely to be seen in Q1 2026 before inflation proves more persistent than the Committee currently expects. The fed funds rate on hold at 3.375% with persistent inflation risks is likely to bias up long-term yields, particularly amid elevated fiscal uncertainty.

The Bank of Canada subsequently kept rates steady at 2.25%, maintaining an accommodative stance to support the economy as it navigates excess capacity and trade uncertainty. The Governing Council remain confident inflation will remain at target with the inflation rate having held close to their target of 2.0% for over a year and excess capacity and softer wage growth likely to offset any upside risk to consumer prices from trade. The labour market has strengthened in recent months but still remains weak compared to where it was prior to the pandemic.

In China meanwhile, consumer inflation accelerated to 0.7%yr in November as producer prices deflation became more even entrenched, with prices down 2.2%yr. The rise in consumer prices reflects increases in the cost of food and gold jewellery versus demand-led inflation which there is little-to-no evidence of. Further support centred on household consumption should broaden consumer inflation through 2026.

Producer prices are unlikely to sustainably grow until capacity tightens, however. This could be a long way off. 'Anti-involution' policies champion profitability, but this does not preclude new more productive supply being invested in to replace old ineffective capacity or to meet demand for new goods and services. Price declines and profitability can therefore co-exist sustainably.