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What changed in ACM Research, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ACM Research, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+366 added−483 removedSource: 10-K (2026-03-02) vs 10-K (2025-03-03)

Top changes in ACM Research, Inc.'s 2025 10-K

366 paragraphs added · 483 removed · 287 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

46 edited+17 added−65 removed43 unchanged
Biggest changeWe added two major new product categorie s in 2022 with the launch of the Ultra Pmax™ PECVD tool, which is equipped with a proprietary designed chamber, gas distribution unit and chuck, and is intended to provide better film uniformity, reduced film stress, and improved particle performance, and the introduction of the Ultra Track tool, a 300mm process tool that delivers uniform air downflow, fast robot handling and customizable software to address specific customer requirements, and has multiple features that enhance performance across defectivity, throughput, and cost of ownership.
Biggest changeOur Ultra Track products include a 300mm process tool that delivers uniform air downflow, fast robot handling and configurable software to address specific customer requirements, and has multiple features that enhance performance across defectivity, throughput, and cost of ownership.
Our other advanced packaging tools include: Ultra ECP ap, which delivers a uniform metal layer to finished wafers prior to packaging; Ultra C Developer, which applies liquid developer to selected parts of photoresist to resolve an image; Ultra C PR Megasonic-Assisted Stripper, which removes photoresist; Ultra C Scrubber, which scrubs and cleans wafers; Ultra C Thin Wafer Scrubber, which addresses a sub-market of cleaning very thin wafers for certain Asian assembly factories; and Ultra C Wet Etcher, which etches silicon wafers and copper and titanium interconnects.
Our other advanced packaging products include: Ultra ECP ap, which delivers a uniform metal layer to finished wafers prior to packaging; Ultra C Developer, which applies liquid developer to selected parts of photoresist to resolve an image; Ultra C PR Megasonic-Assisted Stripper, which removes photoresist; Ultra C Scrubber, which scrubs and cleans wafers; Ultra C Thin Wafer Scrubber, which addresses a sub-market of cleaning very thin wafers for certain Asian assembly factories; and Ultra C Wet Etcher, which etches silicon wafers and copper and titanium interconnects.
We select these independent representatives based on their ability to provide effective field sales, 13 Table of Contents marketing forecast and technical requirement updates for our products. In the case of representatives, our customers place purchase orders with us directly rather than with the representatives. Our sales have historically been made using purchase orders with agreed technical specifications.
We select these independent representatives based on their ability to provide effective field sales, marketing forecast and technical requirement updates for our products. In the case of representatives, our customers place purchase orders with us directly rather than with the representatives. Our sales have historically been made using purchase orders with agreed technical specifications.
To date, substantially all of our sales of equipment for semiconductor-manufacturing have been to customers located in Asia, and we anticipate that a substantial majority of our revenue from these products will continue to come from customers located in this region for the foreseeable future.
Our Customers To date, substantially all of our sales of equipment for semiconductor-manufacturing have been to customers located in mainland China, and we anticipate that a substantial majority of our revenue from these products will continue to come from customers located in this region for the foreseeable future.
We have designed some of our tools to require significantly reduced levels of environmentally harmful chemicals, which helps customers face increased environmental laws and regulations. SAPS and TEBO technologies use environmentally friendly dilute chemicals, such as dilute hydrofluoric acid, RCA SC-1 solution, ozonated de-ionized water and functional de-ionized water with dissolved hydrogen.
We have designed some of our tools to require significantly reduced levels of environmentally harmful chemicals, which helps customers face increased environmental laws and regulations. SAPS and TEBO technologies use environmentally 13 Table of C ontents friendly dilute chemicals, such as dilute hydrofluoric acid, RCA SC-1 solution, ozonated de-ionized water and functional de-ionized water with dissolved hydrogen.
Information that we post on our corporate website could be deemed material to investors. We encourage investors to review the information we post on these channels. We may from time to time update the list of channels we will use to communicate information that could be deemed material and will post information about any such change on www.acmr.com.
We encourage investors to review the information we post on these channels. We may from time to time update the list of channels we will use to communicate information that could be deemed material and will post information about any such change on www.acmr.com.
Our marketing team also has the responsibility to conduct environmental scans, study industry trends and arrange our participation at major trade shows. Manufacturing We conduct a substantial majority of our product development, manufacturing, support and services in mainland China, with additional product development and subsystem production in Korea.
Our marketing team also has the responsibility to conduct environmental scans, study industry trends and arrange our participation at major trade shows. 10 Table of C ontents Manufacturing We conduct a substantial majority of our product development, manufacturing, support and services in mainland China, with additional product development and subsystem production in Korea.
Advanced Packaging and other Back-End Processing Tools We leverage our technology and expertise to provide a range of single-wafer tools for back-end wafer assembly and packaging factories. We develop, manufacture and sell a wide range of advanced packaging tools, such as coaters, developers, photoresist strippers, scrubbers, wet etchers and copper-plating tools.
Advanced Packaging and other Back-End Processing Tools We leverage our technology and expertise to provide a range of single-wafer products for back-end wafer assembly and packaging customers. We develop, manufacture and sell a wide range of advanced packaging equipment, such as coaters, developers, photoresist strippers, scrubbers, wet etchers and copper-plating equipment.
We have 63 patents granted internationally protecting our SAPS technologies, and we have filed 13 international patent applications for key TEBO technologies, and 5 for Tahoe, in accordance with the Patent Cooperation Treaty. In addition, we have patented technologies for SFP and ECP that are embedded in certain tools.
We have 66 patents granted internationally protecting our SAPS technologies, and we have filed 13 international patent applications for key TEBO technologies, and 8 for Tahoe, in accordance with the Patent Cooperation Treaty. In addition, we have patented technologies for SFP and ECP that are embedded in certain tools.
We do not have any insurance coverage for intellectual property infringement claims for which we may be obligated to provide indemnification. 15 Table of Contents Additional information about the risks relating to our intellectual property is provided under “Item 1A.
We do not have any insurance coverage for intellectual property infringement claims for which we may be obligated to provide indemnification. Additional information about the risks relating to our intellectual property is provided under “Item 1A.
Revenue from advanced packaging (excluding ECP), services and spares totaled $52.2 million, or 6.7% of total revenue in 2024, $50.5 million, or 9.1% of total revenue in 2023, and $38.4 million, or 9.9% of total revenue in 2022. Selling prices for our tools generally range from $0.5 million to more than $5 million.
Revenue from advanced packaging (excluding ECP), services and spares totaled $75.8 million, or 8.4% of total revenue in 2025, $52.2 million, or 6.7% of total revenue in 2024, and $50.5 million, or 9.1% of total revenue in 2023. Selling prices for our tools generally range from $0.5 million to more than $5 million.
Coaters typically provide input and output elevators, shuttle systems and other 12 Table of Contents devices to handle and transport wafers during the coating process. Unlike most coaters, the Ultra C Coater is fully automated.
Coaters typically provide input and output elevators, shuttle systems and other 9 Table of C ontents devices to handle and transport wafers during the coating process. Unlike most coaters, the Ultra C Coater is fully automated.
We estimate, based on third-party reports and on customer and other information, that our current product portfolio addresses approximately $18 billion of the 2024 global wafer fab equipment, or WFE, market.
We estimate, based on third-party reports and on customer and other information, that our current product portfolio addresses approximately $21 billion of the 2025 global wafer fab equipment, or WFE, market.
By product line, we estimate an approximately $5.9 billion market opportunity is addressed by our wafer cleaning equipment, $4.7 billion by our Plasma-Enhanced Chemical Vapor Deposition, or PECVD, equipment, $2.8 billion by our Track equipment, $2.4 billion by our furnace equipment, $1 billion by our electro-chemical plating, or ECP, equipment, and more than $1.2 billion by our stress-free polishing, advanced packaging, wafer processing, and other processing equipment.
By product line, we estimate an approximately $7.3 billion market opportunity is addressed by our wafer cleaning equipment, $5.3 billion by our Plasma-Enhanced Chemical Vapor Deposition, or PECVD, equipment, $3.0 billion by our Track equipment, $2.6 billion by our furnace equipment, $1.5 billion by our electro-chemical plating, or ECP, equipment, and more than $1.2 billion by our stress-free polishing, advanced packaging, wafer processing, and other processing equipment.
Once a semiconductor manufacturer has selected a particular supplier’s equipment and qualified it for production, the manufacturer generally maintains that selection for that specific production application and technology node as long as the supplier’s products demonstrate performance to specification in the installed base.
Once a semiconductor manufacturer has selected a particular supplier’s equipment and qualified it for production, the manufacturer generally maintains that selection for that specific production application and 12 Table of C ontents technology node as long as the supplier’s products demonstrate performance to specification in the installed base.
We have used a “demo-to-sales” process to place evaluation equipment, or “first tools,” with a number of selected customers.
We have used a “demo-to-sales” process to place evaluation equipment, or “first tools,” with numerous selected customers.
For this reason, we devote significant financial and personnel resources to research and development. Our research and development team is comprised of highly skilled engineers and technologists with extensive experience in megasonic and other technologies, cleaning processes and chemistry, mechanical design, and control system design.
For this reason, we devote significant financial and personnel resources to research and development. Our research and development team is comprised of highly skilled engineers and technologists with extensive experience across a range of technologies, cleaning processes and chemistry, mechanical design, and control system design.
Of these employees, 1,839 were located in mainland China and the Taiwan region, 160 were located in Korea and 24 were based in the United States. We have never had a work stoppage, and none of our employees are represented by a labor organization or subject to any collective bargaining arrangements. We consider our employee relations to be good.
Of these employees, 2,357 were located in mainland China and the Taiwan region, 127 were located in Korea and 29 were based in the United States. We have never had a work stoppage, and none of our employees are represented by a labor organization or subject to any collective bargaining arrangements. We consider our employee relations to be good.
Revenue from ECP (front-end packaging), furnace and other technologies totaled $151.1 million, or 19.3% of total revenue in 2024, $103.4 million, or 18.5% of total revenue, in 2023, and $77.5 million, or 19.9% of total revenue in 2022.
Revenue from ECP (front-end packaging), furnace and other technologies totaled $199.6 million, or 22.1% of total revenue in 2025, $151.1 million, or 19.3% of total revenue, in 2024, and $103.4 million, or 18.5% of total revenue in 2023.
We consider our principal competitors to be those companies that provide wafer cleaning and electrical plating products to the market, including Lam Research Corporation, NAURA Technology Group Co., Ltd., Mujin Electronics Co., Ltd., SCREEN SPE USA, LLC (a subsidiary of SCREEN Holdings Co., Ltd.), SEMES Co. Ltd., Tokyo Electron Ltd. and Kokusai Semiconductor Equipment Corporation.
We consider our principal competitors to be those companies that provide wafer cleaning, electrical plating and furnace products to the global market, including Lam Research Corporation, NAURA Technology Group Co., Ltd., SCREEN Holdings Co., Ltd., SEMES Co. Ltd., Tokyo Electron Ltd. and Kokusai Semiconductor Equipment Corporation.
We also have patented technologies in other semiconductor processing areas, including wafer preparation and several specific processing steps. To date we have not granted licenses to third parties under the patents described above. Not all of these patents have been implemented in products. We may enter into licensing or cross-licensing arrangements with other companies in the future.
We also have patented technologies in other semiconductor processing areas, including wafer preparation and several specific processing steps. To date we have not granted licenses to third parties under the patents described above. Not all of these patents have been implemented in products.
To assist in employee retention and recruitment, we offer employee housing in the Lingang region of Shanghai nearby our new research and development and production center.
Retention of these key employees is critical to secure our future growth and technology development. To assist in employee retention and recruitment, we offer employee housing in the Lingang region of Shanghai nearby our new research and development and production center.
Our Customers Since 2009 we have delivered more than 1,120 tools to our customers, more than 920 of w hich were repeat orders or acceptances upon contractual performance obligations having been met and thereby generated revenue to us.
Since 2009 we have delivered m ore than 1,435 tools to our customers, more than 1,255 of which were repeat orders or acceptances upon contractual performance obligations having be en met and thereby generated revenue to us.
As o f December 31, 2024, we have been issued more than 537 patents in the United States, mainland China, Japan, Korea, Singapore and Taiwan, including 76 issued patents, and 32 patents pending, in the United States. These patents carry expiration dates from 2027 through 2039.
As of December 31, 2025, we have been issued more than 594 patents in the United States, mainland China, Japan, Korea, Singapore and Taiwan, including 82 issued patents, and 33 patents pending, in the United States. These patents carry expiration dates from 2027 through 2045.
We cannot assure you that any patents will issue from any of our pending applications. Any rights granted under any of our existing or future patents may not provide meaningful protection or any commercial advantage to us.
We may enter into licensing or cross-licensing arrangements with other companies in the future. 11 Table of C ontents We cannot assure you that any patents will issue from any of our pending applications. Any rights granted under any of our existing or future patents may not provide meaningful protection or any commercial advantage to us.
Our sales terms and conditions are generally consistent with industry practice but may vary from customer to customer. We seek to obtain a purchase order two to six months ahead of the customer’s desired delivery date. Consistent with industry practice, we allow customers to reschedule or cancel orders at a certain cost to them on relatively short notice.
Our sales terms and conditions are generally consistent with industry practice but may vary from customer to customer. We seek to obtain a purchase order four to six months ahead of the customer’s desired delivery date. Consistent with industry practice, customers may delay delivery, adjust, or cancel orders prior to shipment subject to penalties.
Our People As of December 31, 2024, we had 2,023 full-time equivalent employees, of whom 165 were in administration, 328 were in manufacturing, 933 were in research and development, and 597 were in sales and marketing and customer services.
Our People As of December 31, 2025, we had 2,513 full-time equivalent employees, of whom 196 were in administration, 365 were in manufacturing, 1,228 were in research and development, and 724 were in sales and marketing and customer services.
Gartner estimates the total worldwide semiconductor WFE market grew by 4.1% from $102.9 billion in 2023 to $107.1 (1) billion in 2024, and estimates will increase by 4.1% to $111.5 billion in 2025.
Gartner estimates the total worldwide semiconductor WFE market grew by 11.0% from $111.6 billion in 2024 to $123.9 billion in 2025, and estimates will increase by 11.8% to $138.5 billion in 2026.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and amendments to those documents filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, or the Exchange Act, are also available free of charge on our website at www.acmr.com a s soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC. 17 Table of Contents Investors should note that we announce material information to our investors and others using filings with the SEC, press releases, public conference calls, webcasts or our website (www.acmr.com), including news and announcements regarding our financial performance, key personnel, our brands and our business strategy.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and amendments to those documents filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, or the Exchange Act, are also available free of charge on our website at www.acmr.com a s soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC.
We have demonstrated the damage-free cleaning capabilities of TEBO technology on 1 The information contains statistical data and estimates, including forecasts, that are based on information provided by Gartner®, "Forecast: Semiconductor Capital Spending, Wafer Fab Equipment and Capacity, Worldwide, 4Q24 Update, Bob Johnson et al., 26 December 2024." 7 Table of Contents patterned wafers for feature nodes as small as 1xnm (16 to 19 nanometers, or nm), and we have shown TEBO technology can be applied in manufacturing processes for patterned chips with 3D architectures having aspect ratios as high as 60‑to‑1. • Tahoe technology for cost and environmental savings.
We have demonstrated the damage-free cleaning capabilities of TEBO technology on patterned wafers for feature nodes as small as 1xnm (16 to 19 nanometers, or nm), and we have shown TEBO technology can be applied in manufacturing processes for patterned chips with 3D architectures having aspect ratios as high as 60‑to‑1. • Tahoe technology for cost and environmental savings.
Our ability to recruit and retain such employees depends on a number of factors, including our corporate culture and work environment, informed by our values and behaviors, our corporate philosophy of talent development and career opportunities, and compensation and benefits. 16 Table of Contents To attract and retain qualified employees and key talent, we offer total compensation packages that are competitive with comparable companies, particularly in mainland China and, specifically, Shanghai.
Our ability to recruit and retain such employees depends on a number of factors, including our corporate culture and work environment, informed by our values and behaviors, our corporate philosophy of talent development and career opportunities, and compensation and benefits.
Our Ultra ECP ap, or Advanced Packaging, technology was developed for back-end assembly processes to deliver a more uniform metal layer at the notch area of wafers prior to packaging. Our Ultra ECP map, or Multi-Anode Partial Plating, technology was developed for front-end wafer fabrication processes to deliver advanced electrochemical copper plating for copper interconnect applications.
Together, these platforms reflect our strategy to evolve into a broader, multi-product supplier supporting advanced logic, memory, power, and packaging applications. • ECP technology for advanced metal plating. Our Ultra ECP ap, or Advanced Packaging, technology was developed for back-end assembly processes to deliver a more uniform metal layer at the notch area of wafers prior to packaging.
Revenue from single wafer cleaning, Tahoe and semi-critical cleaning equipment totaled $578.9 million, or 74.0% of total revenue in 2024, $403.9 million, or 72.4% of total revenue in 2023, and $272.9 million, or 70.2% of total revenue in 2022.
We also develop, manufacture and sell a range of advanced packaging equipment to wafer assembly and packaging customers. Revenue from single wafer cleaning, Tahoe and semi-critical cleaning equipment totaled $626.0 million, or 69.5% of total revenue in 2025, $578.9 million, or 74.0% of total revenue in 2024, and $403.9 million, or 72.4% of total revenue in 2023.
Tahoe technology delivers high cleaning performance using significantly less sulfuric acid and hydrogen peroxide than is typically consumed by conventional high-temperature single-wafer cleaning tools. • ECP technology for advanced metal plating.
Tahoe technology delivers high cleaning performance using significantly less sulfuric acid and hydrogen peroxide than is typically consumed by conventional high-temperature single-wafer cleaning tools. • Semi-critical cleaning. Our cleaning portfolio also comprises a suite of semi-critical cleaning products including single wafer back-side cleaning, scrubber, and auto bench.
The balance of the delivered tools is subject to the customer's acceptance of the tool upon the tool's satisfaction of applicable contractual requirements or subject to the customer's subsequent discretionary commitment to purchase the tool.
The balance of the delivered tools is subject to the customer's acceptance of the tool upon the tool's satisfaction of applicable contractual requirements or subject to the customer's subsequent discretionary commitment to purchase the tool. Our equipment can generally be configured for use by manufacturers, or customer types, who in turn build a range of different semiconductor types.
Because of our relatively short delivery period and our practice of permitting rescheduling or cancellation, we believe that backlog is not a reliable indicator of our future revenue. Our marketing team focuses on our product strategy and technology road maps, product marketing, new product introduction processes, demand assessment and competitive analysis, customer requirement communication and public relations.
Our marketing team focuses on our product strategy and technology road maps, product marketing, new product introduction processes, demand assessment and competitive analysis, customer requirement communication and public relations.
Item 1. Business Overview We supply advanced, innovative capital equipment developed for the global semiconductor industry. Fabricators of advanced integrated circuits, or chips, can use our wet-cleaning and other front-end processing tools in numerous steps to improve product yield, even at increasingly advanced process nodes.
Fabricators of advanced integrated circuits, or chips, can use our wet-cleaning, plating, furnace, PECVD, track, and other front-end processing equipment in numerous steps to improve product yield, even at increasingly advanced process nodes. We have designed these products for use in fabricating foundry, logic and memory chips, including dynamic random-access memory, or DRAM, and 3D NAND-flash memory chips.
Gartner estimates China WFE grew by 11.5%, from $33.7 billion in 2023 to $37.5 billion in 2024, and is expected to decrease by 23.6% to $28.7 billion in 2025 1 .
Gartner estimates China WFE decreased by 1.7%, from $40.0 billion in 2024 to $39.3 billion in 2025, and is expected to decrease by 9.9% to $35.4 billion in 2026 1 .
We provide training and development programs to our employees, and we have trained many of our key engineers and managers for more than a decade. Retention of these key employees is critical to secure our future growth and technology development.
To attract and retain qualified employees and key talent, we offer total compensation packages that are competitive with comparable companies, particularly in mainland China and, specifically, Shanghai. We provide training and development programs to our employees, and we have trained many of our key engineers and managers for more than a decade.
Key competitors for our newly-introduced PECVD and Track products include Lam Research Corporation, Applied Materials, Inc., KINGSEMI Co., Ltd. and Suzhou Jingtuo Semiconductor Technology Co., Ltd.
Principal competitors for our PECVD and Track products also include Lam Research Corporation, Applied Materials, Inc., and Suzhou Jingtuo Semiconductor Technology Co., Ltd . We also face additional competitors based in mainland China across multiple product lines due in part to the recent entrants of local equipment suppliers.
Our tools have been developed using our key proprietary technologies: • Space Alternated Phase Shift, or SAPS, technology for flat and patterned (deep via or deep trench with stronger structure) wafer surfaces. SAPS technology employs alternating phases of megasonic waves to deliver megasonic energy in a highly uniform manner on a microscopic level.
SAPS technology employs alternating phases of megasonic waves to deliver megasonic energy in a highly uniform manner on a microscopic level.
Ultra ECP map offers improved gap-filling performance for ultra-thin seed layer applications, which is critical for advanced nodes at 28nm, 14nm and beyond. We have also introduced and delivered a range of new tools intended to broaden our revenue opportunity with global semiconductor manufacturers.
Our Ultra ECP map, or Multi-Anode Partial Plating, technology was developed for front-end wafer fabrication processes to deliver advanced electrochemical copper plating for copper interconnect applications. Ultra ECP map offers improved gap-filling performance for ultra-thin seed layer applications, which is critical for advanced nodes at 28nm, 14nm and beyond. • Ultra fn Furnace.
Substantially all of our tools are built to order at our Chuansha manufacturing facilities in the Pudong region of Shanghai. In the fourth quarter of 2024, we began initial operations at our Lingang development and production center.
Substantially all of our tools are built to order at our Lingang development and production center. See “Item 2. Properties,” of Part I of this report.
In 2022, 43.8% of our revenue was derived from three customers: The Huali Huahong Group; accounted for 18.2% of our revenue; SMIC accounted for 15.6% of our revenue, and YMTC accounted for 10.0% of our revenue. Sales and Marketing We market and sell our products worldwide using a combination of our direct sales force and third-party representatives.
For information on our customer concentration risks with respect to revenue and accounts receivable, see note 2 to the consolidated financial statements included in this report. Sales and Marketing We market and sell our products worldwide using a combination of our direct sales force and third-party representatives.
Our wet-cleaning equipment has been developed using our proprietary SAPS, TEBO and Tahoe technologies, which allow our tools to remove random defects from a wafer surface effectively, without damaging a wafer or its features, even at increasingly advanced process nodes (the minimum line widths on a chip) of 22nm or less.
Our solutions are deployed across multiple front-end process steps and are optimized to balance performance, yield, throughput, cost of ownership, and environmental considerations. Our wet-cleaning platforms incorporate proprietary SAPS, TEBO, and Tahoe technologies, enabling effective removal of random particles while preserving delicate wafer features, even at increasingly advanced process nodes (the minimum line widths on a chip).
Our tools are offered principally for use in manufacturing chips from 300 millimeter, or mm, silicon wafers, but we also offer solutions for 150mm and 200mm wafers and for nonstandard substrates, including compound semiconductor, quartz, sapphire, glass and plastics.
While our tools are primarily designed for 300mm silicon wafer manufacturing, we also offer solutions for 150mm and 200mm wafers, as well as non-standard substrates including compound semiconductors, quartz, sapphire, glass, and plastics. • Space Alternated Phase Shift, or SAPS, technology for flat and patterned (deep via or deep trench with stronger structure) wafer surfaces.
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We have designed these tools for use in fabricating foundry, logic and memory chips, including dynamic random-access memory, or DRAM, and 3D NAND-flash memory chips. We also develop, manufacture and sell a range of advanced packaging tools to wafer assembly and packaging customers.
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Item 1. Business Overview We supply advanced, innovative capital equipment developed for the global semiconductor industry. Our products are designed to address yield-critical and performance-sensitive process steps that become increasingly difficult as semiconductor devices scale to smaller geometries and more complex structures.
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Our operation includes sales, marketing and services personnel in North America, Western Europe and Southeast Asia to expand and support major new customer initiatives for the products of ACM Shanghai to additional regions beyond mainland China. We are focused on building a strategic portfolio of intellectual property to support and protect our key innovations.
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We focus on developing differentiated process solutions that enable effective particle removal, uniform material deposition, and reliable process control, while helping customers manage cost of ownership, throughput, and environmental considerations. We believe this approach has supported broader adoption of our tools across multiple technology nodes and device types.
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Product extensions include the Ultra SFP ap tool for advanced packaging solutions, the Ultra C VI 18-chamber single wafer cleaning tool for advanced memory devices, and the Ultra ECP 3d platform for through-silicon-via, or tsv, application.
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Our operation includes sales, marketing and services personnel in North America, Western Europe and Southeast Asia to expand and support major new customer initiatives for the products of ACM Shanghai to additional regions beyond mainland China. 1 The information contains statistical data and estimates, including forecasts, that are based on information provided by Gartner®, "Forecast: Semiconductor Capital Spending, Wafer Fab Equipment and Capacity, Worldwide, 4Q25 Update, Revenue Basis, Bob Johnson et al., 23 December 2025." 7 Table of C ontents Our Technology and Product Offerings Semiconductor manufacturing is becoming increasingly complex as device scaling, 3D architectures, advanced packaging, and power efficiency requirements place greater demands on yield-critical process steps.
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New product lines include the Ultra fn Furnace, our first dry processing tool, and a suite of semi-critical cleaning systems which include single wafer back side cleaning, scrubber, and auto bench cleaning tools.
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These trends increase the importance of differentiated process equipment capable of operating within tighter tolerances, supporting new materials, and integrating across multiple manufacturing stages. We develop and deliver a broad portfolio of differentiated semiconductor process equipment that spans front-end wafer fabrication through advanced packaging.
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On November 18, 2021, ACM Shanghai successfully completed its initial public offering of shares of ACM Shanghai in mainland China, which we refer to as the STAR IPO, and its shares began trading on the Shanghai Stock Exchange’s SciTech innovAtion boaRd, known as the STAR Market, which we refer to as the STAR Listing, as described under “Item 7.
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Our product platforms are built around proprietary process technologies and system architectures designed to address increasingly complex device structures, tighter process windows, and rising yield sensitivity at advanced nodes. Our current business mix is primarily from wet cleaning, plating, and advanced packaging.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our Technology and Prod uct Offerings Wet Cleaning Equipment for Front End Production Processes Chip fabricators can use our single-wafer wet-cleaning tools in numerous steps to improve product yield in the front-end production process, during which individual devices are patterned in a chip prior to being interconnected on a wafer.
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We have been investing in the development of new products for several adjacent front-end process steps—including furnace, PECVD, and track—leveraging common design principles, modular platforms, and deep process integration.This multi-product approach enables us to support customers across a larger portion of the manufacturing flow, deepen technical engagement, and is intended to create additional growth opportunities over time.
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We use a modular configuration that enables us to create a wet-cleaning tool meeting the specific requirements of a customer, while using pre-existing designs for chamber, electrical, chemical delivery and other modules.
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Wet Cleaning Equipment for Front End Production Processes Wafer cleaning is a foundational process step in semiconductor manufacturing, directly impacting yield, reliability, and device performance across every major technology node.
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Our modular approach supports a wide range of customer needs and facilitates the adaptation of our model tools for use with the optimal chemicals selected to meet a customer’s requirements.
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As device architectures have evolved toward smaller geometries, higher aspect ratios, and complex 3D structures, cleaning requirements have become increasingly demanding—requiring effective particle and residue removal while minimizing pattern damage and chemical consumption. Our wet cleaning portfolio is designed to address these challenges through proprietary process technologies, modular architectures, and application-specific configurations that support both advanced and mature nodes.
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SAPS Technology, Applications and Equipment SAPS Technology SAPS technology delivers megasonic energy uniformly to every point on an entire wafer by alternating phases of megasonic waves in the gap between a megasonic transducer and the wafer. Radicals for removing random defects are generated in dilute solution, and the radical generation is promoted by megasonic energy.
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The systems are built on a modular architecture that allows customers to tailor tool configurations to specific process requirements, while leveraging standardized chamber, electrical, chemical delivery, and control modules. 8 Table of C ontents This approach supports rapid configuration, efficient qualification, and optimized chemical selection without sacrificing reliability or scalability.
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Unlike “stationary” megasonic transducers used in conventional megasonic cleaning methods, SAPS technology moves or tilts a transducer while a wafer rotates, enabling megasonic energy to be delivered uniformly across all points on the wafer, even if the wafer is warped.
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ECP, Furnace, PECVD, and Track Platforms Building on our core strengths in wet processing, ACM has expanded into several adjacent front-end process categories, including electrochemical plating (ECP), furnace, PECVD, and track platforms.
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The mechanical force of cavitations generated by megasonic energy enhances the mass transfer rate of dislodged random defects and improves particle removal efficiency. 8 Table of Contents By delivering megasonic energy in a highly uniform manner on a microscopic level, SAPS technology can precisely control the intensity of megasonic energy and can effectively remove random defects of all sizes across the entire wafer in less total cleaning time than conventional megasonic cleaning products, without loss of material or roughing of wafer surfaces.
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Each of these product lines incorporates our differentiated approach to tool design, process control, and modular architecture, allowing us to apply proprietary technologies across multiple steps in the manufacturing flow.
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We have conducted trials demonstrating SAPS technology to be more effective than conventional megasonic and jet spray cleaning technologies as defect sizes shrink from 300nm to 20nm and below.
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Our ECP portfolio addresses both front-end interconnect formation and back-end advanced packaging applications, while our furnace, PECVD, and track platforms are at earlier stages of customer evaluation and adoption, with meaningful long-term growth potential.
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These trials show that SAPS technology has an even greater relative advantage over conventional jet spray technology for cleaning defects between 50 and 65nm in size, and we expect the relative benefits of SAPS will continue to apply in cleaning even smaller defect sizes.
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Our Ultra fn Furnace is our first dry processing tool. Our Ultra fn vertical furnace features a proprietary quartz-based process chamber capable of operating at temperatures up to 1250°C while maintaining uniformity, a performance level that we believe is not currently achieved by other vertical furnace platforms. • Ultra Pmax™ PECVD tools.
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SAPS Applications SAPS megasonic cleaning technology can be applied during the chip fabrication process to clean wafer surfaces and interconnects. It also can be used to clean, and lengthen the lifetime, of recycled test wafers. Wafer Surfaces.
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Our Ultra Pmax™ PECVD products are equipped with a proprietary designed chamber, gas distribution unit and chuck, and is intended to provide better film uniformity, reduced film stress, and improved particle performance. • Ultra Track.
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SAPS technology can enhance removal of random defects following planarization and deposition, which are among the most important, and most repeated, steps in the fabrication process: • Post CMP : Chemical mechanical planarization, or CMP, uses an abrasive chemical slurry following other fabrication processes, such as deposition and etching, in order to achieve a smooth wafer surface in preparation for subsequent processing steps.
Added
Our revenue by customer type was distributed as follows: Foundry/Logic/Other represented 59%, 71%, and 64% of total revenue in 2025, 2024, and 2023, respectively; Memory represented 27%, 22%, and 24%; and Advanced Packaging/Wafer Processing represented 14%, 7%, and 13% for the same periods.
Removed
SAPS technology can be applied following each CMP process to remove residual random defects deposited or formed during CMP. • Post Hard Mask Deposition: As part of the photolithographical patterning process, a mask is applied with each deposition of a material layer to prevent etching of material intended to be retained.
Added
Longer term, we are working on new proprietary process capabilities based on our existing tool hardware platforms. We are also working to integrate our tools with third-party tools in adjacent process areas in the chip manufacturing flow. Intellectual Property Our success and future revenue growth depend, in part, on our ability to protect our intellectual property.
Removed
Hard masks have been developed to etch high aspect-ratio features of advanced chips that traditional masks cannot tolerate. SAPS technology can be applied following each deposition step involving hard masks that use nitride, oxide or carbon-based materials to achieve higher etch selectivity and resolution. For these purposes, SAPS technology uses environmentally friendly dilute chemicals, reducing chemical consumption.
Added
Investors should note that we announce material information to our investors and others using filings with the SEC, press releases, public conference calls, webcasts or our website (www.acmr.com), including news and announcements regarding our financial performance, key personnel, our brands and our business strategy. Information that we post on our corporate website could be deemed material to investors.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

113 edited+29 added−39 removed324 unchanged
Biggest changeGovernment has implemented an outbound investment review mechanism, which may prevent us from taking advantage of investment opportunities outside the United States that could otherwise be advantageous to our stockholders; • changes in government trade policies that could limit the demand for our tools and increase the cost of our tools; • changes in political and economic policies with respect to mainland China; • mainland China’s currency exchange control and government restrictions on investment repatriation may impact our ability to transfer funds outside of mainland China; Risks Related to the STAR Listing of ACM Shanghai • our ability to implement our strategy to expand our mainland China operations; • our ability to achieve the results contemplated by our business strategy and our strategy for growth in mainland China and expectations related to the STAR Listing; • the effect of ACM Shanghai’s status as a publicly traded company that is controlled, but less than wholly owned, by ACM Research; • our ability to manage potentially inconsistent accounting and disclosure requirements of ACM Research and ACM Shanghai as a result of the STAR Listing; Risks Related to Our Intellectual Property and Data Security • our ability to protect our intellectual property, including in mainland China; • breaches of our cybersecurity systems; Risks Related to Ownership of Class A Common Stock • the volatility in the market price of Class A common stock; • manipulative short sellers of our stock, which may drive down the market price of our Class A common stock and could result in litigation; • the difficulty to predict the effect of the STAR Listing and STAR IPO on the Class A common stock; • the dual class structure of common stock, which has the effect of concentrating voting control with our executive officers and directors; and • the limited experience of our management team managing a public company.
Biggest changeGovernment has implemented an outbound investment review mechanism, which may prevent us from taking advantage of investment opportunities outside the United States and/or receiving capital from investors in the United States that could otherwise be advantageous to our stockholders; • changes in government trade policies that could limit the demand for our tools and/or increase the cost of our tools; • we may be subject to risks related to recent U.S. tariffs on the semiconductor industry; • changes in political and economic policies with respect to mainland China; and • mainland China’s currency exchange control and government restrictions on investment repatriation may impact our ability to transfer funds outside of mainland China; Risks Related to the STAR Listing of ACM Shanghai • our ability to implement our strategy to expand our mainland China operations; 15 Table of C ontents • our ability to achieve the results contemplated by our business strategy and our strategy for growth in mainland China and expectations related to the STAR Listing; • the effect of ACM Shanghai’s status as a publicly traded company that is controlled, but less than wholly owned, by ACM Research; • our ability to manage potentially inconsistent accounting and disclosure requirements of ACM Research and ACM Shanghai as a result of the STAR Listing; Risks Related to Our Intellectual Property and Data Security • our ability to protect our intellectual property, including in mainland China; • breaches of our cybersecurity systems; Risks Related to Ownership of Class A Common Stock • the volatility in the market price of Class A common stock; • the difficulty to predict the effect of the STAR Listing on the Class A common stock; • the dual class structure of common stock, which has the effect of concentrating voting control with our executive officers and directors; and • manipulative short sellers of our stock, which may drive down the market price of our Class A common stock and could result in litigation; Risks Related to International Aspects of Our Business If any mainland China central government authority were to determine that existing mainland China laws or regulations require that ACM Shanghai obtain the authority’s permission or approval to continue the listing of ACM Research’s Class A common stock in the United States or if those existing mainland China laws and regulations, or interpretations thereof, were to change to require such permission or approval, or if we inadvertently conclude that permissions or approvals are not required, ACM Shanghai may be unable to obtain the required permission or approval or may only be able to obtain such permission or approval on terms and conditions that impose material new restrictions and limitations on operation of ACM Shanghai, either of which could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects and on the trading price of ACM Research Class A common stock, which could decline in value or become worthless.
In addition, if mainland China were to impose additional tariffs on raw materials, subsystems or other supplies that we source from the United States, our cost for those supplies would increase.
In addition, if mainland China were to impose additional tariffs on raw materials, subsystems or other supplies that we source from the United States, our cost for those supplies would increase.
As a result of any of the foregoing events, the imposition of new or additional tariffs may limit our ability to manufacture tools, increase our selling and/or manufacturing costs, decrease margins, or inhibit our ability to sell tools or to purchase necessary equipment and supplies, which could have a material adverse effect on our business, results of operations, or financial condition.
As a result of any of the foregoing events, the imposition of new or additional tariffs may limit our ability to manufacture tools, increase our selling and/or manufacturing costs, decrease margins, or inhibit our ability to sell tools or to purchase necessary equipment and supplies, which could have a material adverse effect on our business, results of operations, or financial condition.
Our organizational structure has become more complex, including as a result of the STAR Listing and the STAR IPO. We will need to continue to scale and adapt our operational, financial and management controls, as well as our reporting systems and procedures, at both ACM Research and ACM Shanghai.
Our organizational structure has become more complex, including as a result of the STAR Listing. We will need to continue to scale and adapt our operational, financial and management controls, as well as our reporting systems and procedures, at both ACM Research and ACM Shanghai.
Investors may elect to invest in our business and operations by purchasing ACM Shanghai shares on the STAR Market rather than purchasing ACM Research Class A common stock, and that reduction in demand could lead to a decrease in the market price for the Class A common stock.
In addition, investors may elect to invest in our business and operations by purchasing ACM Shanghai shares on the STAR Market rather than purchasing ACM Research Class A common stock, and that reduction in demand could lead to a decrease in the market price for the Class A common stock.
We cannot assure you that we will realize any or all of our anticipated benefits of the STAR Listing and the STAR IPO, which may not have the anticipated effects of including the strengthening of our market position and operations in mainland China.
We cannot assure you that we will realize any or all of our anticipated benefits of the STAR Listing, which may not have the anticipated effects of including the strengthening of our market position and operations in mainland China.
Risks Related to International Aspects of Our Business • if any mainland China central government authority were to determine that existing mainland China laws or regulations require that ACM Shanghai obtain the authority’s permission or approval to continue the listing of ACM Research’s Class A common stock in the United States or if those existing mainland China laws and regulations, or interpretations thereof, were to change to require such permission or approval, or if we inadvertently conclude that permissions or approvals are not required, ACM Shanghai may be unable to obtain the required permission or approval or may only be able to obtain such permission or approval on terms and conditions that impose material new restrictions and limitations on operation of ACM Shanghai, either of which could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects and on the trading price of ACM Research Class A common stock, which could decline in value or become worthless; • mainland China central government authorities may intervene in, or influence, ACM Shanghai’s mainland China-based operations at any time, and those authorities’ rules and regulations in mainland China can change quickly with little or no advance notice; • the mainland China central government may determine to exert additional control over offerings conducted overseas or foreign investment in mainland China-based issuers, which could result in a material change in operations of ACM Shanghai and cause significant declines in the value of ACM Research Class A common stock, or make them worthless; • if we are unable to comply with recent and proposed legislation and regulations regarding improved access to audit and other information and audit inspections of accounting firms, including registered public accounting firms, such as our prior and current audit firms, operating in mainland China, we could be adversely affected; • it may be difficult for overseas regulators to conduct investigations or collect evidence within mainland China; • substantially all of our assets are located outside of the United States which may make it difficult for you to enforce your rights based on the U.S. federal securities laws; Risks Related to Our Business and Our Industry • our potential future needs for additional capital that may not be available at all or on terms acceptable to us; • the cyclicality in the semiconductor industry that may lead to substantial variations in demand for our products; • our dependence on a small number of customers for a substantial portion of our revenue; • industry manufacturers of chips adopting our SAPS, TEBO, Tahoe, ECP, furnace and other technologies; • our SAPS, TEBO, Tahoe, ECP, furnace and other technologies not achieving widespread market acceptance; 18 Table of Contents • our ability to continue to enhance our existing single-wafer wet cleaning tools and identifying and entering new product markets; • our ability to establish and maintain a reputation for credibility and product quality; • our ability to expand our customer base; • our long and unpredictable sales cycle, including our incurrence of significant expenses long before we can recognize revenue from new products, if at all; • difficulties in forecasting demand for our tools; • our reliance on third parties to manufacture significant portions of our tools and our ability to manage our relationships with these parties; • any shortage of components or subassemblies, which could result in delayed delivery of products to us or in increased costs to us; • our dependence on a limited number of suppliers, including single source suppliers, for critical components and subassemblies; • our dependence on our Chief Executive Officer and President and other senior management and key employees; Regulatory Risks • regulatory actions limiting our ability and the broader industry's ability to export into China, as well as other specified countries, items sourced from the U.S. or otherwise subject to control under the U.S.
Risks Related to International Aspects of Our Business • if any mainland China central government authority were to determine that existing mainland China laws or regulations require that ACM Shanghai obtain the authority’s permission or approval to continue the listing of ACM Research’s Class A common stock in the United States or if those existing mainland China laws and regulations, or interpretations thereof, were to change to require such permission or approval, or if we inadvertently conclude that permissions or approvals are not required, ACM Shanghai may be unable to obtain the required permission or approval or may only be able to obtain such permission or approval on terms and conditions that impose material new restrictions and limitations on operation of ACM Shanghai, either of which could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects and on the trading price of ACM Research Class A common stock, which could decline in value or become worthless; 14 Table of C ontents • mainland China central government authorities may intervene in, or influence, ACM Shanghai’s mainland China-based operations at any time, and those authorities’ rules and regulations in mainland China can change quickly with little or no advance notice; • the mainland China central government may determine to exert additional control over offerings conducted overseas or foreign investment in mainland China-based issuers, which could result in a material change in operations of ACM Shanghai and cause significant declines in the value of ACM Research Class A common stock, or make them worthless; • if we are unable to comply with recent and proposed legislation and regulations regarding improved access to audit and other information and audit inspections of accounting firms, including registered public accounting firms, such as our prior and current audit firms, operating in mainland China, we could be adversely affected; • it may be difficult for overseas regulators to conduct investigations or collect evidence within mainland China; • substantially all of our assets are located outside of the United States which may make it difficult for you to enforce your rights based on the U.S. federal securities laws; Risks Related to Our Business and Our Industry • our potential future needs for additional capital that may not be available at all or on terms acceptable to us; • the cyclicality in the semiconductor industry that may lead to substantial variations in demand for our products; • our dependence on a small number of customers for a substantial portion of our revenue; • industry manufacturers of chips adopting our SAPS, TEBO, Tahoe, ECP, furnace and other technologies; • our SAPS, TEBO, Tahoe, ECP, furnace and other technologies not achieving widespread market acceptance; • our ability to continue to enhance our existing single-wafer wet cleaning tools and identifying and entering new product markets; • our ability to establish and maintain a reputation for credibility and product quality; • our ability to expand our customer base; • our long and unpredictable sales cycle, including our deployment of significant expenses long before we can recognize revenue from new products, if at all; • difficulties in forecasting demand for our tools; • our reliance on third parties to manufacture significant portions of our tools and our ability to manage our relationships with these parties; • any shortage of components or subassemblies, which could result in delayed delivery of products to us or in increased costs to us; • our dependence on a limited number of suppliers, including single source suppliers, for critical components and subassemblies; • our dependence on our Chief Executive Officer and President and other senior management and key employees; Regulatory Risks • regulatory actions limiting our ability and the broader industry's ability to export into China, as well as other specified countries, items, software, or technology sourced from the U.S. or otherwise subject to control under the U.S.
As a result, economic downturns could cause material adverse changes to our results of operations and financial condition including: • a decline in demand for our products; 35 Table of Contents • an increase in reserves on accounts receivable due to our customers’ inability to pay us; • an increase in reserves on inventory balances due to excess or obsolete inventory as a result of our inability to sell such inventory; • valuation allowances on deferred tax assets; • restructuring charges; • asset impairments; • a decline in the value of our investments; • exposure to claims from our suppliers for payment on inventory that is ordered in anticipation of customer purchases that do not come to fruition; • a decline in the value of certain facilities we lease to less than our residual value guarantee with the lessor; and • challenges maintaining reliable and uninterrupted sources of supply.
As a result, economic downturns could cause material adverse changes to our results of operations and financial condition including: • a decline in demand for our products; • an increase in reserves on accounts receivable due to our customers’ inability to pay us; • an increase in reserves on inventory balances due to excess or obsolete inventory as a result of our inability to sell such inventory; • valuation allowances on deferred tax assets; • restructuring charges; • asset impairments; • a decline in the value of our investments; • exposure to claims from our suppliers for payment on inventory that is ordered in anticipation of customer purchases that do not come to fruition; • a decline in the value of certain facilities we lease to less than our residual value guarantee with the lessor; and • challenges maintaining reliable and uninterrupted sources of supply.
See also “—Our supply chain may be materially adversely impacted due to global events, including public health issues, transportation delays, and the armed conflict in Ukraine.” These issues and our ability to manage increased demand could delay shipments of our tools, increase our testing or production costs or lead to costly failure claims.
See also “—Our supply chain may be materially adversely impacted due to global events, including public health issues and the armed conflict in Ukraine.” These issues and our ability to manage increased demand could delay shipments of our tools, increase our testing or production costs or lead to costly failure claims.
Our failure to successfully leverage the completion of the STAR Listing and the STAR IPO, and any future financings by ACM Shanghai, to expand our mainland China business could result in a decrease in the price of the Class A common stock, and we cannot assure you that the success of ACM Shanghai will have an attendant positive effect on the price of the Class A common stock.
Our failure to successfully leverage the completion of the STAR Listing the STAR IPO,and the STAR Private Offering, and any future financings by ACM Shanghai, to expand our mainland China business could result in a decrease in the price of the Class A common stock, and we cannot assure you that the success of ACM Shanghai will have an attendant positive effect on the price of the Class A common stock.
Financial and other markets in the United States and worldwide have experienced significant volatility reflecting uncertainty over, among other things, (a) the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States and mainland China, (b) unrest in Ukraine, the Middle East and Africa, and (c) the rising level of inflation in major industrial countries, including the United States, and worries that efforts to curb 24 Table of Contents inflation may result in an economic recession.
Financial and other markets in the United States and worldwide have experienced significant volatility reflecting uncertainty over, among other things, (a) the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States and mainland China, (b) unrest in Ukraine, the Middle East and Africa, and (c) the rising level of inflation in major industrial countries, including the United States, and worries that efforts to curb inflation may result in an economic recession.
The Bureau of Industry and Security of the U.S. Department of Commerce (BIS), which administers the EAR, recently imposed, and may continue to impose, additional restrictions under the EAR on certain exports to China, to include Hong Kong and Macau, including restrictions targeting the semiconductor manufacturing industry in China. These types of restrictions may impact the operations of ACM Shanghai.
The Bureau of Industry and Security of the U.S. Department of Commerce (BIS), which administers the EAR, has imposed, and may continue to impose, additional restrictions under the EAR on certain exports to China, to include Hong Kong and Macau, including restrictions targeting the semiconductor manufacturing industry in China. These types of restrictions may impact the operations of ACM Shanghai.
Any potential intellectual property claims or litigation commenced against us could: • be time consuming and expensive to defend, whether or not meritorious; • force us to stop selling products or using technology that allegedly infringes the third party’s intellectual property rights; • delay shipments of our products; • require us to pay damages or settlement fees to the party claiming infringement; • require us to attempt to obtain a license to the relevant intellectual property, which may not be available on reasonable terms or at all; • force us to attempt to redesign products that contain the allegedly infringing technology, which could be expensive or which we may be unable to do; • require us to indemnify our customers, suppliers or other third parties for any loss caused by their use of our technology that allegedly infringes the third party’s intellectual property rights; or • divert the attention of our technical and managerial resources.
Any potential intellectual property claims or litigation commenced against us could: • be time consuming and expensive to defend, whether or not meritorious; • force us to stop selling products or using technology that allegedly infringes the third party’s intellectual property rights; • delay shipments of our products; • require us to pay damages or settlement fees to the party claiming infringement; • require us to attempt to obtain a license to the relevant intellectual property, which may not be available on reasonable terms or at all; 40 Table of C ontents • force us to attempt to redesign products that contain the allegedly infringing technology, which could be expensive or which we may be unable to do; • require us to indemnify our customers, suppliers or other third parties for any loss caused by their use of our technology that allegedly infringes the third party’s intellectual property rights; or • divert the attention of our technical and managerial resources.
It also remains unclear what further actions the SEC, the PCAOB or Nasdaq may take to address these issues and what impact those actions will have on U.S. companies, such as ours, that have significant operations in mainland China and have securities listed on a U.S. stock exchange.
It remains unclear, however, what further actions the SEC, the PCAOB or Nasdaq may take to address these issues and what impact those actions will have on U.S. companies, such as ours, that have significant operations in mainland China and have securities listed on a U.S. stock exchange.
Since 2018, th e U.S. government has imposed new or higher tariffs on specified imported products originating from mainland China in response to what the U.S. government characterized as unfair trade practices. The mainland China government responded to each of these rounds of U.S. tariff changes by imposing new or higher tariffs on specified products imported from the United States.
Since 2018, the U.S. government has imposed new or higher tariffs on specified imported products originating from mainland China in response to what the U.S. government characterized as unfair trade practices. The mainland China government responded to each of these rounds of U.S. tariff changes by imposing new or higher tariffs on specified products imported from the United States.
Because the lead-time needed to produce a tool customized to a customer’s specifications can extend up to six months, we may need to begin production of tools based on non-binding forecasts, rather than waiting to receive a binding purchase order.
Because the lead-time needed to produce a tool configured to a customer’s specifications can extend up to six months, we may need to begin production of tools based on non-binding forecasts, rather than waiting to receive a binding purchase order.
If we do not accurately predict the amount and timing of a customer’s future purchases, we risk expending time and resources on producing a customized tool that is not purchased by a particular customer, which may result in excess or unwanted inventory, or we may be unable to fulfill an order on the schedule required by a purchase order, which would result in foregone sales.
If we do not accurately predict the amount and timing of a customer’s future purchases, we risk expending time and resources on producing a specific configured tool that is not purchased by a particular customer, which may result in excess or unwanted inventory, or we may be unable to fulfill an order on the schedule required by a purchase order, which would result in foregone sales.
Some of our products and supplies may become obsolete or be deemed excess while in inventory due to rapidly changing customer specifications, changes in product structure, components or bills of material as a result of engineering changes, or a decrease in customer demand.
Some of our products and supplies may become obsolete or be deemed excess while in inventory due to changes in customer specifications, changes in product structure, components or bills of material as a result of engineering changes, or a decrease in customer demand.
As we 41 Table of Contents expand our global operations through operating subsidiaries outside of mainland China, those operating subsidiaries may need to license intellectual property from ACM Shanghai in order to operate, and there can be no assurance that conflicts of interest will not preclude those operating subsidiaries from licensing the required intellectual property from ACM Shanghai on reasonable terms or at all.
As we expand our global operations through operating subsidiaries outside of mainland China, those operating subsidiaries may need to license intellectual property from ACM Shanghai in order to operate, and there can be no assurance that conflicts of interest will not preclude those operating subsidiaries from licensing the required intellectual property from ACM Shanghai on reasonable terms or at all.
Our charter provides that the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for: • any derivative action or proceeding brought on our behalf; • any action asserting a claim of breach of a fiduciary duty owed to us, our stockholders, creditors or other constituents by any of our directors, officers, other employees, agents or stockholders; • any action asserting a claim arising under the Delaware General Corporation Law, our charter or bylaws, or as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware; or • any action asserting a claim that is governed by the internal affairs doctrine.
Our charter provides that the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for: • any derivative action or proceeding brought on our behalf; • any action asserting a claim of breach of a fiduciary duty owed to us, our stockholders, creditors or other constituents by any of our directors, officers, other employees, agents or stockholders; 43 Table of C ontents • any action asserting a claim arising under the Delaware General Corporation Law, our charter or bylaws, or as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware; or • any action asserting a claim that is governed by the internal affairs doctrine.
The mainland China central government may determine to exert additional control over securities offerings conducted overseas and/or foreign investment in mainland China-based issuers, which could result in a material adverse change in operations of ACM Shanghai and cause the value of ACM Research Class A common stock to significantly decline or 22 Table of Contents become worthless.
The mainland China central government may determine to exert additional control over securities offerings conducted overseas and/or foreign investment in mainland China-based issuers, which could result in a material adverse change in operations of ACM Shanghai and cause the value of ACM Research Class A common stock to significantly decline or become worthless.
Accordingly, our financial condition and results of operations are affected to a significant extent by economic, political and legal development in mainland China. 38 Table of Contents The Chinese economy differs from the economies of most developed countries in many respects, including the extent of government involvement, level of development, growth rate, and control of foreign exchange and allocation of resources.
Accordingly, our financial condition and results of operations are affected to a significant extent by economic, political and legal development in mainland China. The Chinese economy differs from the economies of most developed countries in many respects, including the extent of government involvement, level of development, growth rate, and control of foreign exchange and allocation of resources.
In addition, we believe that the length of the sales cycle and intensity of the evaluation process may increase for those current and potential customers that centralize their purchasing decisions. 30 Table of Contents Difficulties in forecasting demand for our tools may lead to periodic inventory shortages or excess spending on inventory items that may not be used.
In addition, we believe that the length of the sales cycle and intensity of the evaluation process may increase for those current and potential customers that centralize their purchasing decisions. Difficulties in forecasting demand for our tools may lead to periodic inventory shortages or excess spending on inventory items that may not be used.
Such a mechanism could negatively impact our ability to realize value from certain existing and future investments, including by limiting exit opportunities or causing us to favor buyers that may avoid complex notification requirements, even in circumstances where other buyers may offer better terms or more consideration.
Such a mechanism could negatively impact our ability to realize value from certain existing and future investments, including by limiting exit opportunities or causing us to favor buyers or investors that may avoid complex notification requirements or even outright prohibitions, even in circumstances where other buyers may offer better terms or more consideration.
Instead, all of the Class B com mon stock generally will convert into Class A common stock only upon the election of the holders of a majority of the then-outstanding shares of Class B common stock, and specific shares of Class B common stock will convert into Class A common stock upon future transfers by the holders of those shares.
Instead, all of the Class B common stock generally will convert into Class A common stock only upon the election of the holders of a majority of the then-outstanding shares of Class B common stock, and specific shares of Class B common stock will convert into Class A common stock upon future transfers by the holders of those shares.
To date our strategy for commercializing our tools has been to place them with selected industry leaders in the manufacturing of memory and logic chips, the two largest chip categories, to enable those leading manufacturers to 27 Table of Contents evaluate our technologies, and then leverage our reputation to gain broader market acceptance.
To date our strategy for commercializing our tools has been to place them with selected industry leaders in the manufacturing of memory and logic chips, the two largest chip categories, to enable those leading manufacturers to evaluate our technologies, and then leverage our reputation to gain broader market acceptance.
ACM and ACM Shanghai have implemented modifications to their existing business policies and 36 Table of Contents practices in response to these enhanced export restrictions, including by imposing limitations on the activities of their U.S. persons and undertaking measures in connection with their supply chains more broadly to comply with the new regulations.
ACM and ACM Shanghai have implemented modifications to their existing business policies and practices in response to these enhanced export restrictions, including by imposing limitations on the activities of their U.S. persons and undertaking measures in connection with their supply chains more broadly to comply with the new regulations.
From time to time, this industry has experienced significant downturns, often in connection with, or in anticipation of, 26 Table of Contents maturing product and technology cycles, excess inventories and declines in general economic conditions. This cyclicality could cause our operating results to decline dramatically from one period to the next.
From time to time, this industry has experienced significant downturns, often in connection with, or in anticipation of, maturing product and technology cycles, excess inventories and declines in general economic conditions. This cyclicality could cause our operating results to decline dramatically from one period to the next.
We canno t reasonably estimate the duration or impact of such a downturn, and it could have a material adverse effect on our business and the value of our Class A common stock. Conversely, during industry upturns we must successfully increase production output to meet expected customer demand.
We cannot reasonably estimate the duration or impact of such a downturn, and it could have a material adverse effect on our business and the value of our Class A common stock. Conversely, during industry upturns we must successfully increase production output to meet expected customer demand.
In the case of semiconductor manufacturing equipment, the new rules require an export license for the export, re-export, or transfer to or within mainland China of additional types of semiconductor manufacturing equipment, items for use in manufacturing designated types of semiconductor manufacturing equipment (along with other items subject to the EAR, for use in the development or production of ICs), and semiconductor manufacturing equipment for use at certain IC manufacturing and development facilities in mainland China.
In the case of semiconductor manufacturing equipment, the new rules require an export license for the export, re-export, or transfer to or within mainland China, Hong Kong and Macau of additional types of semiconductor manufacturing equipment, items for use in manufacturing designated types of semiconductor manufacturing equipment (along with other items subject to the EAR, for use in the development or production of ICs), and semiconductor manufacturing equipment for use at certain IC manufacturing and development facilities in mainland China.
As a result, it is unlikely that funds raised or generated by ACM Shanghai will be readily distributable to ACM Research. If we succeed in raising additional funds through the issuance of equity or convertible securit ies, then the issuance could result in substantial dilution to existing stockholders.
As a result, it is unlikely that funds raised or generated by ACM Shanghai will be readily distributable to ACM Research. If we succeed in raising additional funds through the issuance of equity or convertible securities, then the issuance could result in substantial dilution to existing stockholders.
Our financial results in any given quarter can be influenced by a variety of factors, including: • the cyclicality of the semiconductor industry and the related impact on the purchase of equipment used in the manufacture of chips; • the timing of purchases of our tools by chip fabricators, which order types of tools based on multi-year capital plans under which the number and dollar amount of tool purchases can vary significantly from year to year; • the relatively high average selling price of our tools and our dependence on a limited number of customers for a substantial portion of our revenue in any period, whereby the timing and volume of purchase orders or cancellations from our customers could significantly reduce our revenue for that period; • the significant expenditures required to customize our products often exceed the deposits received from our customers; • the lead time required to manufacture our tools; • the timing of recognizing revenue due to the timing of shipment and acceptance of our tools; • our ability to sell additional tools to existing customers; • the changes in customer specifications or requirements; • the length of our product sales cycle; • changes in our product mix, including the mix of systems, upgrades, spare parts and service; • the timing of our product releases or upgrades or announcements of product releases or upgrades by us or our competitors, including changes in customer orders in anticipation of new products or product enhancements; • our ability to enhance our tools with new and better functionality that meet customer requirements and changing industry trends; • constraints on our suppliers’ capacity; • our ability to sell our tools to Chinese customers due to regulatory restrictions, including the addition of our customers to the Entity List; • the ability of other suppliers to provide sufficient quantities of their tools to our Chinese customers which may indirectly impact the production plans of our customers and result in a reduction of demand for our tools; • the timing of investments in research and development related to releasing new applications of our technologies and new products; • delays in the development and manufacture of our new products and upgraded versions of our products and the market acceptance of these products when introduced; • our ability to control costs, including operating expenses and the costs of the components and subassemblies used in our products; • the costs related to the acquisition and integration of product lines, technologies or businesses; and • the costs associated with protecting our intellectual property, including defending our intellectual property against third-party claims or litigation.
Our financial results in any given quarter can be influenced by a variety of factors, including: • the cyclicality of the semiconductor industry and the related impact on the purchase of equipment used in the manufacture of chips; • the timing of purchases of our tools by chip fabricators, which order types of tools based on multi-year capital plans under which the number and dollar amount of tool purchases can vary significantly from year to year; • the relatively high average selling price of our tools and our dependence on a limited number of customers for a substantial portion of our revenue in any period, whereby the timing and volume of purchase orders or cancellations from our customers could significantly reduce our revenue for that period; • the significant expenditures required to configure our products often exceed the deposits received from our customers; • the lead time required to manufacture our tools; • the timing of recognizing revenue due to the timing of shipment and acceptance of our tools; • our ability to sell additional tools to existing customers; • the changes in customer specifications or requirements; • the length of our product sales cycle; • changes in our product mix, including the mix of systems, upgrades, spare parts and service; • the timing of our product releases or upgrades or announcements of product releases or upgrades by us or our competitors, including changes in customer orders in anticipation of new products or product enhancements; • our ability to enhance our tools with new and better functionality that meet customer requirements and changing industry trends; • constraints on our suppliers’ capacity; • our ability to sell our tools to Chinese customers due to regulatory restrictions, including the addition of our customers to the Entity List; • the ability of other suppliers to provide sufficient quantities of their tools to our Chinese customers which may indirectly impact the production plans of our customers and result in a reduction of demand for our tools; • the timing of investments in research and development related to releasing new applications of our technologies and new products; • delays in the development and manufacture of our new products and upgraded versions of our products and the market acceptance of these products when introduced; • our ability to control costs, including operating expenses and the costs of the components and subassemblies used in our products; • the costs related to the acquisition and integration of product lines, technologies or businesses; and • the costs associated with protecting our intellectual property, including defending our intellectual property against third-party claims or litigation. 22 Table of C ontents Seasonality has played an increasingly important role in the market for chip manufacturing tools.
In accordance with industry practice, our sales are on a purchase order basis, which we seek to obtain three to four months in advance of the expected product delivery date. Until a purchase order is received, we do not have a binding purchase 29 Table of Contents commitment.
In accordance with industry practice, our sales are on a purchase order basis, which we seek to obtain three to four months in advance of the expected product delivery date. Until a purchase order is received, we do not have a binding purchase commitment.
Certain of our stockholders may be non-U.S. investors, and in the aggregate, may comprise a substantial portion of our net asset value, which may increase the risks of such limitations being imposed 39 Table of Contents in connection with investments pursued or made by us.
Certain of our stockholders may be non-U.S. investors, and in the aggregate, may comprise a substantial portion of our net asset value, which may increase the risks of such limitations being imposed in connection with investments pursued or made by us.
Implementation and enforcement of intellectual property-related laws in mainland China has historically been 43 Table of Contents lacking due primarily to ambiguities in mainland China intellectual property law. Accordingly, protection of intellectual property and proprietary rights in mainland China may not be as effective as in the United States or other countries.
Implementation and enforcement of intellectual property-related laws in mainland China has historically been lacking due primarily to ambiguities in mainland China intellectual property law. Accordingly, protection of intellectual property and proprietary rights in mainland China may not be as effective as in the United States or other countries.
Some of these failures may not be discovered until we have expended significant resources in customizing our tools, or until our tools have been installed in our customers’ production facilities.
Some of these failures may not be discovered until we have expended significant resources in configuring our tools, or until our tools have been installed in our customers’ production facilities.
The U.S. Government has implemented an outbound investment review mechanism, which may prevent us from taking advantage of investment opportunities outside the United States that could otherwise be advantageous to our stockholders. On November 15, 2024, the Office of Investment Security of the U.S.
The U.S. Government has implemented an outbound investment review mechanism, which may prevent us from taking advantage of investment opportunities that could otherwise be advantageous to our stockholders. On November 15, 2024, the Office of Investment Security of the U.S.
During the three and twelve months ended December 30, 2023, two prominent exporters of advanced semiconductor manufacturing equipment, the Netherlands and Japan, announced and began to implement plans to join the United States in imposing semiconductor-focused export controls.
Outside of the U.S., during the three and twelve months ended December 30, 2023, two prominent exporters of advanced semiconductor manufacturing equipment, the Netherlands and Japan, announced and began to implement plans to join the United States in imposing semiconductor-focused export controls.
Even issued patents may later be found unenforceable or may be modified or revoked in proceedings instituted by third parties before various patent offices or in courts. The degree 42 Table of Contents of future protection for our intellectual property is uncertain.
Even issued patents may later be found unenforceable or may be modified or revoked in proceedings instituted by third parties before various patent offices or in courts. The degree of future protection for our intellectual property is uncertain.
As a consequence of the concentrated nature of our customer base, our revenue and results of operations may fluctuate from quarter to quarter and are difficult to estimate, and any cancellation of orders or any acceleration or delay in anticipated product purchases or the acceptance of shipped products by our larger customers could materially affect our revenue and results of operations in any quarterly period.
As a consequence of the concentrated nature of our customer base, our revenue and results of operations may fluctuate from quarter to quarter and are difficult to estimate, and any cancellation of orders or any acceleration or delay in 23 Table of C ontents anticipated product purchases or the acceptance of shipped products by our larger customers could materially affect our revenue and results of operations in any quarterly period.
Most of our competitors are larger than we are and have substantially greater resources, and they therefore are likely to be able to sustain the costs of complex patent litigation longer than we could. An adverse outcome in such litigation or proceedings may expose us to loss of our proprietary position.
Most of 39 Table of C ontents our competitors are larger than we are and have substantially greater resources, and they therefore are likely to be able to sustain the costs of complex patent litigation longer than we could. An adverse outcome in such litigation or proceedings may expose us to loss of our proprietary position.
Changes in government trade policies could limit the demand for our tools and increase the cost of our tools. General trade tensions between the United States and mainland China escalated be ginning in 2018, and have continued to escalate.
Changes in government trade policies could limit the demand for our tools and increase the cost of our tools. General trade tensions between the United States and mainland China escalated beginning in 2018, and have continued to escalate.
Additional actions could take the form of further revisions to the Entity List or Unverified List, new export restrictions, further expansions to the geographic scope of the controls, or additional tariffs or other trade restrictions. It is also possible that other countries could adopt similar semiconductor-focused export controls to align with the October 2022 and October 2023 U.S. actions.
Additional actions could take the form of further revisions to the Entity List or Unverified List, new export restrictions, further expansions to the geographic scope of the controls, or additional tariffs or other trade restrictions. It is also possible that other countries could adopt similar semiconductor-focused export controls to align with the U.S. actions.
If we are unable to obtain new customers and continue to achieve widespread market acceptance of our tools, then our business, operations, financial results and growth prospects will be materially and adversely affected. If we do not continue to enhance our existing tools and achieve market acceptance, we will not be able to compete effectively.
If we are unable to obtain new customers and continue to achieve widespread market acceptance of our tools, then our business, operations, financial results and growth prospects will be materially and adversely affected. 24 Table of C ontents If we do not continue to enhance our existing tools and achieve market acceptance, we will not be able to compete effectively.
Alternate sources may not be available or 32 Table of Contents may result in delays in shipments to us from our supply chain and subsequently to our customers, each of which would affect our results of operations.
Alternate sources may not be available or may result in delays in shipments to us from our supply chain and subsequently to our customers, each of which would affect our results of operations.
Moreover, some of our suppliers may experience financial difficulties that could prevent them from supplying us with components or subassemblies used in the design and manufacture of our products. In addition, our suppliers, including our sole supplier ProSys, may experience manufacturing delays or shutdowns due to circumstances beyond their control, such as labor issues, political unrest or natural disasters.
Moreover, some of our suppliers may experience financial difficulties that could prevent them from supplying us with components or subassemblies used in the design and manufacture of our products. In addition, our key suppliers may experience manufacturing delays or shutdowns due to circumstances beyond their control, such as labor issues, political unrest or natural disasters.
The use of the Internet, social media, and blogging have allowed short sellers to publicly attack a company’s credibility, strategy and veracity by means of so-called “research reports” that mimic the type of investment analysis performed by legitimate securities research analysts.
The use of the Internet, social media, and blogging have allowed short sellers to publicly attack a company’s 44 Table of C ontents credibility, strategy and veracity by means of so-called “research reports” that mimic the type of investment analysis performed by legitimate securities research analysts.
Although the authorities in mainland China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism.
Although the authorities in mainland China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and 19 Table of C ontents practical cooperation mechanism.
Accordingly, you should not rely upon our past quarterly financial results as indicators of future 25 Table of Contents performance. Any variations in our quarter-to-quarter performance may cause our stock price to fluctuate.
Accordingly, you should not rely upon our past quarterly financial results as indicators of future performance. Any variations in our quarter-to-quarter performance may cause our stock price to fluctuate.
ACM Shanghai is not subject to the existing restrictions imposed by the Cyber Security Law or the Data Security Law, in part because its business operations do not involve the collection, processing or use of data or information involving personal privacy or private information of customers.
ACM Shanghai is not subject to the existing restrictions imposed by the Cyber Security Law or the Data Security Law, in part because its business operations do not involve the collection, processing or use of data 17 Table of C ontents or information involving personal privacy or private information of customers.
In addition, such Rules specify that mergers and acquisitions 21 Table of Contents by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by MOFCOM.
In addition, such Rules specify that mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by MOFCOM.
Our failure to manage these risks successfully could adversely affect our business, operating results and financial condition. Fluctuation in foreign currency exchange rates may adversely affect our results of operations and financial position. Our results of operations and financial position could be adversely affected as a result of fluctuations in foreign currency exchange rates.
Our failure to manage these risks successfully could adversely affect our business, operating results and financial condition. 20 Table of C ontents Fluctuation in foreign currency exchange rates may adversely affect our results of operations and financial position. Our results of operations and financial position could be adversely affected as a result of fluctuations in foreign currency exchange rates.
The chip manufacturing industry is highly concentrated, and we derive most of our revenue from a limited number of customers. A total of four customers accounted for 52.2% of our revenue in 2024, three customers accounted for 45.5%% of our revenue in 2023, and three customers accounted for 43.8% of our revenue in 2022.
The chip manufacturing industry is highly concentrated, and we derive most of our revenue from a limited number of customers. A total of four customers accounted for 52.2% of our revenue in 2025, four customers accounted for 52.2% of our revenue in 2024, and three customers accounted for 45.5% of our revenue in 2023.
The imposition of tariffs by the U.S. and mainland China governments and the surrounding economic uncertainty may negatively impact the semiconductor industry, including by reducing the demand of fabricators for capital equipment such as our tools.
The imposition of tariffs by the U.S. and mainland China governments and the surrounding economic uncertainty may negatively impact the semiconductor industry, including by reducing the demand of fabricators for capital 18 Table of C ontents equipment such as our tools.
These new restrictions have impacted the procurement by ACM Shanghai of certain items from the United States, and of certain items subject to U.S. export controls from outside the United States, for use in manufacturing its products.
These new restrictions have impacted the procurement by ACM Shanghai and ACM Korea of items, technology and software from the United States, and of certain commodities subject to U.S. export controls from outside the United States, for use in manufacturing its products.
Since ACM Shanghai completed the STAR Listing and the STAR IPO in November 2021, it has been subject to accounting, disclosure and other regulatory requirements of the STAR Market. At the same time, ACM Research remains subject to accounting, disclosure and other regulatory requirements of the SEC and the Nasdaq Global Market, or Nasdaq.
Since ACM Shanghai completed the STAR Listing, it has been subject to accounting, disclosure and other regulatory requirements of the STAR Market. At the same time, ACM Research remains subject to accounting, disclosure and other regulatory requirements of the SEC and the Nasdaq Global Market, or Nasdaq.
ACM Shanghai continues to have broad discretion in the use of the proceeds from the initial sales of shares to investors and the proceeds from the STAR IPO, and will have similar discretion over the use of proceeds from future financing activities (including follow-on offerings or private placements of shares with mainland China investors).
ACM Shanghai continues to have broad discretion in the use of the proceeds from the initial sales of shares to investors and the 37 Table of C ontents proceeds from the STAR IPO and the STAR Private Offering, and will have similar discretion over the use of proceeds from future financing activities (including follow-on offerings or private placements of shares with mainland China investors).
There are significant risks associated with our reliance on these third-party suppliers, including: • potential price increases; • capacity shortages or other inability to meet any increase in demand for our products; • reduced control over manufacturing process for components and subassemblies and delivery schedules; • limited ability of some suppliers to manufacture and sell subassemblies or parts in the volumes we require and at acceptable quality levels and prices, due to the suppliers’ relatively small operations and limited manufacturing resources; • increased exposure to potential misappropriation of our intellectual property; and • limited warranties on subassemblies and components supplied to us.
There are significant risks associated with our reliance on these third-party suppliers, including: • potential price increases; • capacity shortages or other inability to meet any increase in demand for our products; • reduced control over manufacturing process for components and subassemblies and delivery schedules; • limited ability of some suppliers to manufacture and sell subassemblies or parts in the volumes we require and at acceptable quality levels and prices, due to the suppliers’ relatively small operations and limited manufacturing resources; • increased exposure to potential misappropriation of our intellectual property; and • limited warranties on subassemblies and components supplied to us. 28 Table of C ontents Any delays in the shipment of our products due to our reliance on third-party suppliers could harm our relationships with our customers.
BIS imposed additional controls on exports to, and transfers within, the People’s Republic of China PRC relating to advanced integrated circuit products, certain IC manufacturing equipment and technology, and supercomputers associated with artificial intelligence (AI) and advanced computing.
On December 2, 2024, the U.S. BIS imposed additional controls on exports to, and transfers within, the People’s Republic of China PRC relating to advanced integrated circuit products, certain IC manufacturing equipment and technology, and supercomputers associated with artificial intelligence (AI) and advanced computing.
The market price of Class A common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our revenue and other operating results; • the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; • actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • changes in projections for the chips or chip equipment industries or in the operating performance or expectations and stock market valuations of chip companies, chip equipment companies or technology companies in general; • changes in operating results; • any changes in the financial projections we may provide to the public, our failure to meet these projections, or changes in recommendations by any securities analysts that elect to follow Class A common stock; • additional shares of Class A common stock being sold into the market by us or our existing stockholders or the anticipation of such sales; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; • lawsuits threatened or filed against us; • litigation and other developments relating to our patents or other proprietary rights or those of our competitors; • developments in new legislation and pending lawsuits or regulatory actions, including interim or final rulings by judicial or regulatory bodies; and • general economic trends, including changes in the demand for electronics or information technology or geopolitical events such as war or acts of terrorism, or any responses to such events.
The market price of Class A common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our revenue and other operating results; • the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; • actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • changes in projections for the chips or chip equipment industries or in the operating performance or expectations and stock market valuations of chip companies, chip equipment companies or technology companies in general; • changes in operating results; • any changes in the financial projections we may provide to the public, our failure to meet these projections, or changes in recommendations by any securities analysts that elect to follow Class A common stock; • additional shares of Class A common stock being sold into the market by us or our existing stockholders or the anticipation of such sales; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; • lawsuits threatened or filed against us; • litigation and other developments relating to our patents or other proprietary rights or those of our competitors; • developments in new legislation and pending lawsuits or regulatory actions, including interim or final rulings by judicial or regulatory bodies; and • general economic trends, including changes in the demand for electronics or information technology or geopolitical events such as war or acts of terrorism, or any responses to such events. 41 Table of C ontents In recent years, the stock market in general, and Nasdaq in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to changes in the operating performance of the companies whose stock is experiencing those price and volume fluctuations.
In addition, BIS imposed new restrictions by which U.S. persons anywhere in the world are effectively barred from engaging in certain activities related to the development and production of semiconductors at mainland China fabrication facilities meeting specified criteria, even if no items subject to the EAR are involved. The October 2022 restrictions were later expanded to include Macau.
In addition, BIS imposed new restrictions by which U.S. persons anywhere in the world are effectively barred from engaging in certain activities related to the development and production of semiconductors at mainland China fabrication facilities meeting specified criteria, even if no items subject to the EAR are involved.
Our ability to introduce and market successfully any new or enhanced cleaning equipment is subject to a wide variety of challenges during the tool’s development, including the following: • accurate anticipation of market requirements, changes in technology and evolving standards; • the availability of qualified product designers and technologies needed to solve difficult design challenges in a cost-effective, reliable manner; • our ability to design products that meet chip manufacturers’ cost, size, acceptance and specification criteria, and performance requirements; • the ability and availability of suppliers and third-party manufacturers to manufacture and deliver the critical components and subassemblies of our tools in a timely manner; • market acceptance of our customers’ products, and the lifecycle of those products; and • our ability to deliver products in a timely manner within our customers’ product planning and deployment cycle. 28 Table of Contents Certain enhancements to our products in future periods may reduce demand for our pre-existing tools.
Our ability to introduce and market successfully any new or enhanced cleaning equipment is subject to a wide variety of challenges during the tool’s development, including the following: • accurate anticipation of market requirements, changes in technology and evolving standards; • the availability of qualified product designers and technologies needed to solve difficult design challenges in a cost-effective, reliable manner; • our ability to design products that meet chip manufacturers’ cost, size, acceptance and specification criteria, and performance requirements; • the ability and availability of suppliers and third-party manufacturers to manufacture and deliver the critical components and subassemblies of our tools in a timely manner; • market acceptance of our customers’ products, and the lifecycle of those products; and • our ability to deliver products in a timely manner within our customers’ product planning and deployment cycle.
Inc., as a key supplier of valves used in our semiconductor capital equipment; and certain companies from other countries which supply components and subsystems used in our semiconductor capital equipment.
Inc., as a key supplier of valves used in our 29 Table of C ontents semiconductor capital equipment; and certain companies from other countries which supply components and subsystems used in our semiconductor capital equipment.
Moreover, in connection with the STAR Listing and the STAR IPO, ACM Shanghai is now managed by a group of officers separate from those of ACM Research and those officers owe fiduciary duties to the various stakeholders of ACM Shanghai.
Moreover, in connection 30 Table of C ontents with the STAR Listing, ACM Shanghai is now managed by a group of officers separate from those of ACM Research and those officers owe fiduciary duties to the various stakeholders of ACM Shanghai.
Export Administration Regulations (EAR), or controls introduced by other countries including Japan and the Netherlands, thereby impacting our ability to sell our tools to customers in these jurisdictions; • our operations in mainland China and Korea subsidiaries, including the import of components, technology, and activities of U.S. personnel therein, may be further impacted by the addition of ACM Shanghai, ACM Korea and related entities to the BIS Entity List; • the U.S.
Export Administration Regulations (EAR), or controls introduced by other countries including Japan and the Netherlands, thereby impacting our ability to sell our tools to customers in these jurisdictions, source certain services from these jurisdictions, and/or engage in R&D activities with our foreign affiliates; • our operations in mainland China and Korea subsidiaries, including the import of components, technology, and activities of U.S. personnel therein, may be further impacted by the addition of ACM Shanghai, ACM Korea and related entities to the BIS Entity List; • the U.S.
The potential impact on sales to our customers will also depend on the effect of the new regulations on their own spending plans. We do not anticipate an impact to the ability to sell, deliver and service products to our global customers outside of mainland China.
The potential impact on sales to our customers will also depend on the effect of the new regulations on the overall spending plans of our customers. We do not anticipate a significant impact to the ability to sell, deliver and service products to our global customers outside of mainland China.
Because of the twenty-to-one voting ratio between Class B and Class A common stock, h olders of Class B common stock collectively will continue to control a majority of the combined voting power of Class A common stock and therefore be able to control all matters submitted to our stockholders for approval so long as the shares of Class B common stock represent at least 4.8% of all outstanding shares of Class A and Class B common stock.
Because of the twenty-to-one voting ratio between Class B and Class A common stock, holders of Class B common stock collectively will continue to control a majority of the combined voting power of Class A common stock and therefore 42 Table of C ontents be able to control all matters submitted to our stockholders for approval so long as the shares of Class B common stock represent at least 4.8% of all outstanding shares of Class A and Class B commo n stock.
Our supply chain may be materially adversely impacted due to global events, including any new COVID‑19 outbreaks or other public health issues, transportation delays, and the armed conflict in Ukraine. We rely upon the facilities of our global suppliers with operations in mainland China, Japan, Taiwan and the United States to support our business.
Our supply chain may be materially adversely impacted due to global events, including public health issues and the armed conflict in Ukraine. We rely upon the facilities of our global suppliers with operations in mainland China, Japan, Taiwan and the United States to support our business.
In general terms, the new BIS Entity List designations prohibit any party worldwide from furnishing hardware, software, or technologies that are subject to U.S. export controls jurisdiction to ACM Shanghai or ACM Korea. See “Item 1A.
In general terms, the new BIS Entity List designations prohibit any party worldwide from furnishing hardware, software, or technologies that are subject to U.S. export controls jurisdiction directly or indirectly to ACM Shanghai or ACM Korea without obtaining authorization.
In most cases, license applications for these exports are reviewed under a presumption of denial.
In most cases, license applications for these exports are 32 Table of C ontents reviewed under a presumption of denial.
In October 2022, BIS announced new rules that significantly expanded U.S. export controls as applied to advanced IC products, related manufacturing equipment and technology, and supercomputers, where the destination or ultimate end user is based in mainland China.
Beginning in October 2022 and continuing through 2025, BIS announced a series of new rules that significantly expanded U.S. export controls as applied to advanced IC products, related manufacturing equipment and technology, and supercomputers, where the destination or ultimate end user is based in mainland China, Hong Kong and Macau.
Our product warranty requires us to provide labor and parts necessary to repair defects. As of December 31, 2024, we had 31 Table of Contents accrued $12.7 million in liability contingency for potential warranty claims.
Our product warranty requires us to provide labor and parts necessary to repair defects. As of December 31, 2025, we had accrued $19.1 million in liability contingency for potential warranty claims.
Even though substantially all of the operations of ACM Research are currently conducted through ACM Shanghai, the information disclosed by the two companies will differ, and may differ materially from time to time, due to the distinct, and potentially inconsistent, accounting standards applicable to the two companies and disclosure requirements imposed by securities regulatory authorities, as well as differences in language, culture and expression habit, in composition of investors in the United States and mainland China, and in the capital markets of the United States and mainland China.
Even though substantially all of the operations of ACM Research are currently conducted through ACM Shanghai, the information disclosed by the two companies will differ, and may differ materially from time to time, due to the distinct, and potentially inconsistent, accounting standards applicable to the two companies and disclosure requirements imposed by securities regulatory authorities, as well as differences in language, culture and expression habit, in composition of investors in the United States and mainland China, and in the capital markets of the United States and mainland China. 38 Table of C ontents Differing disclosures could lead to confusion or uncertainty among investors in the publicly traded shares of one or both companies.
Among the 140 companies added to the BIS Entity List were two subsidiaries of ACM Research, ACM Shanghai, located in the People’s Republic of China, and ACM Korea, a direct subsidiary of ACM Shanghai, which is located in the Republic of Korea, and other related entities.
Effective on December 2, 2024, BIS promulgated a final rule naming a number of companies to the BIS Entity List Among the 140 companies added to the BIS Entity List were two subsidiaries of ACM Research, ACM Shanghai, located in the People’s Republic of China, and ACM Korea, a direct subsidiary of ACM Shanghai, which is located in the Republic of Korea, and other related entities.
In coordination with the new regulations, among other updates, ACM Shanghai and its operating subsidiaries in China and Korea, were added to the Entity List published by BIS. Neither ACM, nor its direct subsidiaries outside of mainland China, were added to the Entity List.
In coordination with the new regulations, among other updates, ACM Shanghai and its operating subsidiaries in China and Korea, were added to the Entity List published by BIS. Neither ACM, nor its direct subsidiaries outside of mainland China, were added to the Entity List. The regulations prohibit ACM Shanghai and ACM Korea from obtaining U.S.-sourced components, software or technology.
Class B common stock has twenty votes per share and Class A common stock has one vote per share. As of February 24, 2025, stockholders who hold shares of Class B common stock, who consist principally of our executive officers, employees, directors and their respective affiliates, collectively held 64.2% of the voting power of our outstanding capital stock.
Class B common stock has twenty votes per share and Class A common stock has one vote per share. As of February 25, 2025, stockholders who hold shares of Class B common stock, who consist principally of our executive officers, employees, directors and their respe ctive affiliates, collect ively held 62.3% of the voting power of our outstanding capital stock.
If our tools contain defects or do not meet customer specifications, we could lose customers and revenue. Highly complex tools such as ours may develop defects during the manufacturing and assembly process. We may also experience difficulties in customizing our tools to meet customer specifications or detecting defects during the development and manufacturing of our tools.
Highly complex tools such as ours may develop defects during the manufacturing and assembly process. We may also experience difficulties in configuring our tools to meet customer specifications or detecting defects during the development and manufacturing of our tools.
Such potential sanctions or pressure may include fines and penalties on ACM Shanghai’s operations in mainland China, limitations on its operating privileges in mainland China, delays in or restrictions on the transfer of proceeds from a public offering of ACM Research securities in the United States to ACM Shanghai, restrictions on or prohibition of the payments or remittance of dividends by ACM Shanghai to ACM Research, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of ACM Research Class A common stock, which could decline in value or become worthless. 20 Table of Contents Mainland China central government authorities may intervene in, or influence, ACM Shanghai’s mainland China-based operations at any time, and those authorities’ rules and regulations in mainland China can change quickly with little or no advance notice.
Such potential sanctions or pressure may include fines and penalties on ACM Shanghai’s operations in mainland China, limitations on its operating privileges in mainland China, delays in or restrictions on the transfer of proceeds from a public offering of ACM Research securities in the United States to ACM Shanghai, restrictions on or prohibition of the payments or remittance of dividends by ACM Shanghai to ACM Research, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of ACM Research Class A common stock, which could decline in value or become worthless.
We rely on: Product Systems, Inc., or ProSys, as the sole supplier of megasonic transducers, a key subassembly used in our semiconductor capital equipment; Ninebell Co., Ltd., or Ninebell, as the principal supplier of robotic delivery system subassemblies used in our semiconductor capital equipment; Advanced Electric Co.
We rely on Ninebell Co., Ltd., or Ninebell, as the principal supplier of robotic delivery system subassemblies used in our semiconductor capital equipment; Advanced Electric Co.
Alternatively, if a court were to find the choice of forum provision contained in our charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition. 47 Table of Contents We incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies which could adversely affect our business, operating results and financial condition.
Alternatively, if a court were to find the choice of forum provision contained in our charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs part of our risk management process, we conduct application security assessments, vulnerability management, penetration testing, security audits, and ongoing risk assessments. We also maintain a variety of incident response plans that are utilized when incidents are detected. We require employees with access to information systems, including all corporate employees, to undertake data protection and cybersecurity training and compliance programs.
Biggest changeAs part of our risk management process, we conduct application security assessments, vulnerability management, penetration testing, security audits, and ongoing risk assessments. We also maintain a variety of incident response plans 45 Table of C ontents that are utilized when incidents are detected.
Cybersecurity Governance Cybersecurity is an important part of our risk management processes. Our Audit Committee is responsible for the oversight of risks from cybersecurity threats. Members of the Audit Committee receive reports of any breaches or developments 49 Table of Contents regarding matters of cybersecurity.
Cybersecurity Governance Cybersecurity is an important part of our risk management processes. Our Audit Committee is responsible for the oversight of risks from cybersecurity threats. Members of the Audit Committee receive reports of any breaches or developments regarding matters of cybersecurity.
Added
We require employees with access to information systems, including all corporate employees, to undertake data protection and cybersecurity training and compliance programs.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeConstruction of t he five-building complex which comprises more than 1,485,000 square foot of floor space in aggregate is nearly completed, and is intended to incorporate state-of-the-art manufacturing systems and automation technologies and provide the floor space to significantly increase production capacity and support additional research and development activities when fully-staffed and supplied.
Biggest changeACM Shanghai, through ACM Lingang, conducts manufacturing, warehousing and R&D operations at its R&D and Production Center in the Lingang region of Shanghai. Th e five-building complex comprises more than 1,485,000 square foot of floor space in aggregate, and incorporates state-of-the-art manufacturing systems and automation technologies.
The facility is being used for our U.S.-based sales and services team to support customer activities in the region. 50 Table of Contents On October 1, 2024, we acquired a commercial facility, comprised of 39,500 square foot total floor space and which includes a 5,200 square foot functional clean room, for a price of $7.75 million.
We also lease a 10,683 square foot facility in Hillsborough, Oregon, which is used for our U.S.-based sales and services team to support customer activities in the region. 46 Table of C ontents On October 1, 2024, we acquired a commercial facility, comprised of 39,500 square foot total floor space and which includes a 5,200 square foot functional clean room, for a price of $7.75 million.
This facility is located in the City of Hillsboro in Oregon, and is intended to further expand our research and development and demonstration capabilities in the United States market.
This facility is located in the City of Hillsboro in Oregon, and we have begun investments to expand our research and development, production, and demonstration capabilities in the United States market.
After that ten-year period expires, ACM Lingang’s subsidiary may use the apartment units as stock of commercial housing and may sell them separately in sets. Effective April 1, 2023, we entered an agreement to lease a 10,683 square foot facility in Hillsborough, Oregon beginning April 1, 2023 until August 31, 2030.
After that ten-year period expires, ACM Lingang’s subsidiary may use the apartment units as stock of commercial housing and may sell them separately in sets.
This facility has been leased since 2007 and currently extends until December 31, 2025. In addition, we perform sales support, customer service operations, R&D, and/ or production activities from leased facilities in Beijing, Chengdu, Jiangyin and Wuxi in mainland China and Icheon in Korea.
Additional research and development, service support and administrative activities are conducted at a multi-story leased facility also in Shanghai's ZhangJiang Science City.In addition, we perform sales support, customer service operations, R&D, and/ or production activities from leased facilities in Beijing, Chengdu, Jiangyin and Wuxi in mainland China and in Jinwi, Gwangju, Baekam, and Seongnam in Korea.
We conduct manufacturing, warehousing and R&D operations at three leased facilities located in the Chuansha area of Shanghai located about ten miles from ACM Shanghai's headquarters. The first facility includes a total of 103,318 square feet, of which 100,000 square feet are allocated for production, with a lease which extends until January 15, 2028.
ACM Shanghai leases several facilities totaling more than 200,000 square feet, which are located in the Chuansha area of Shanghai and are used for R&D, production and warehousing.
Removed
Item 2. Properties We have occupied our current corporate headquarters in Fremont, California, since February 2008, under a lease that, after an amendment in January 2025, now extends through March 31, 2027. Our new corporate headquarters for ACM Shanghai comprises of four buildings, purchased in the twelve months ended December 31, 2023.
Added
Item 2. Properties Our corporate headquarters are in a leased facility located in Fremont, California ACM Shanghai's mainland China headquarters includes four company-owned buildings located in Shanghai's ZhangJiang Science City, where ACM Shanghai conducts sales, marketing, R&D and administrative activities.
Removed
The facilities are situated in ZhangJiang E-Park located in the ZhangJiang Science City part of the Pudong district of Shanghai, where ACM Shanghai conducts sales, marketing, R&D and administrative activities. Additional research and development, service support operations and administrative activities are conducted at a multi-story office building located on Cailun Road in the ZhangJiang Science City in Shanghai.
Removed
The second facility includes a total of 106,076 square feet of which 100,000 square feet are allocated for production, and the lease extends unti l July 15, 2025.
Removed
The third facility includes a total of 105,970 s quare feet which provides additional manufacturing and w arehousing space, and subsequent to December 31, 2024, the lease w as extended until December 31, 2027.
Removed
In May 2020 ACM Shanghai, through its wholly owned subsidiary ACM Lingang, entered into an agreement for a 50-year land use right in the Lingang region of Shanghai. In July 2020 ACM Lingang began a multi-year construction project for a new development and production center.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. As of December 31, 2024, the Company had no outstanding material legal proceedings, other than ordinary routine litigation incidental to the business.
Biggest changeRegardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. As of December 31, 2025, the Company had no outstanding material legal proceedings, other than ordinary routine litigation incidental to the business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSale Date Exercised Shares (Net) November 5, 2024 27,028 November 14, 2024 34,058 November 14, 2024 262,738 Total 323,824 Performance Graph The following graph compares the total return of an investment of $100 in cash at the closing price of November 3, 2017, which is the date our common stock first began trading on Nasdaq, through December 31, 2024 for (1) our common stock, (2) the Russell 1000 index, and (3) the Nasdaq Composite Index.
Biggest changePerformance Graph The following graph compares the total return of an investment of $100 in cash at the closing price as of December 31, 2020 and as of each year ended through December 31, 2025 for (1) our common stock, (2) the Russell 1000 index, and (3) the Nasdaq Composite Index. All values assume reinvestment of all dividends.
As of February 24, 2025, there were 5,021,811 shares of Class B common stock held of record by 16 stockholders. We have never declared or paid cash dividends on our capital stock.
As of February 25, 2026, there were 5,021,811 shares of Class B common stock held of record by 16 stockholders. We have never declared or paid cash dividends on our capital stock.
The recipients of the shares acquired the securities for investment only and not with 51 Table of Contents a view to or for sale in connection with any distribution thereof, and appropriate legends were recorded with respect to the shares. The recipients of the shares were accredited investors under Rule 501 of Regulation D.
The recipients of the shares acquired the securities for 47 Table of C ontents investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were recorded with respect to the shares. The recipients of the shares were accredited investors under Rule 501 of Regulation D.
All values assume reinvestment of all dividends. Stockholder returns over the indicated period are based on historical data and are not necessarily indicative of future stockholder returns. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among ACM Research, Inc., the Nasdaq Index, and the Russell 1000 Index
Stockholder returns over the indicated period are based on historical data and are not necessarily indicative of future stockholder returns. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among ACM Research, Inc., the Nasdaq Index, and the Russell 1000 Index
Holders of Common Stock As of February 24, 2025, there were 58,107,893 shares of Class A common stock outstanding held of r ecord by 46 stockholders. The actual number of holders of Class A common stock is substantially greater and includes stockholders who are beneficial owners and whose shares are held of record by banks, brokers, and other financial institutions.
Holders of Common Stock A s of February 25, 2026, there were 60,705,783 shares of Class A common stock outstanding held of record by 46 stockholders. The actual number of holders of Class A common stock is substantially greater and includes stockholders who are beneficial owners and whose shares are held of record by banks, brokers, and other financial institutions.
Sales of Unregistered Securities During the three months ended December 31, 2024, ACM Research issued, pursuant to the exercise of stock options at a per share exercise price of $0.50 per s hare, an aggregate of 323,824 shares of Clas s A common stock that were not registered under the Securities Act of 1933.
Sales of Unregistered Securities In the years ended December 31, 2025, 2024, and 2023, ACM Research issued, pursuant to the exercise of stock options at a per share exercise price of $0.50 per s hare, an aggregate o f 381,926, 945 ,010, and 646,057 shares of Clas s A common stock that were not registered under the Securities Act of 1933.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeNet cash provided by financing for the year ended December 31, 2024 was $92.5 million, primarily consisting of $130.2 million net proceeds from short and long-term borrowings, and $11.1 million in proceeds from the exercise of stock options, offset by ($ 41.9 million) of short-term and long-term loan repayment, and ($6.9 million) of dividends paid by ACM Shanghai. 71 Table of Contents We and ACM Shanghai, together with the subsidiaries of ACM Shanghai, have short-term and long-term borrowings with six banks, as follows: Lender Agreement Date Maturity Date Annual Interest Rate Maximum Borrowing Amount(1) Amount Outstanding at December 31, 2024 (in thousands) China CITIC Bank (2) July 2023 Repayable by installments and the last installments repayable in December 2025 3.45 % RMB200,000 RMB99,896 $ 27,820 $ 13,881 China Everbright Bank December 2024 December 2027 2.60 % RMB600,000 RMB399,327 $ 83,460 $ 55,549 China Merchants Bank August 2024 August 2025 2.60 % RMB200,000 RMB66,048 $ 27,820 $ 9,185 Bank of China September 2024 September 2025 2.50%-2.75% RMB400,000 RMB363,265 $ 55,640 $ 50,533 Industrial and Commercial Bank of China November 2024 November 2027 2.50 % RMB300,000 NIL $ 41,730 $ — Shanghai Pudong Development Bank December 2024 September 2025 2.60 % RMB300,000 NIL $ 41,730 $ — China Merchants Bank August 2024 August 2034 2.95 % RMB1,000,000 NIL $ 139,100 $ — Bank of China November 2024 November 2035 2.70 % RMB1,000,000 NIL $ 139,100 $ — China Merchants Bank November 2020 Repayable by installments and the last installments repayable in November 2030 3.65 % RMB128,500 RMB82,499 $ 17,874 $ 11,475 Agricultural Bank of China April 2024 Repayable by installments and the last installments repayable in April 2034 2.53%-2.78% RMB300,000 RMB93,604 $ 41,730 $ 13,020 Bank of Shanghai December 2022 October 2024 2.85 % RMB100,000 RMB100,079 $ 13,910 $ 13,920 72 Table of Contents China CITIC Bank August 2023 Repayable by installments and the last installments repayable in August,2025 3.10 % RMB100,000 RMB99,886 $ 13,910 $ 13,894 Industrial Bank of Korea December 2023 December 2024 4.27 % KRW2,000,000 KRW2,000,000 $ 1,354 $ 1,354 $ 645,178 $ 182,811 (1) Converted from RMB to dollars as of December 31, 2024.
Biggest changeWe and ACM Shanghai, together with the subsidiaries of ACM Shanghai, have short-term and long-term borrowings with the following lenders, as follows: Lender Agreement Date Maturity Date Annual Interest Rate Maximum Borrowing Amount(1) Amount Outstanding at December 31, 2025 (in thousands) China CITIC Bank (2) January 2025 Repayable by installments and the last installments repayable in January 2028 3.60 % RMB200,000 RMB199,980 $ 28,460 $ 28,460 China Everbright Bank December 2024 September 2027 2.60 % RMB600,000 RMB399,207 $ 85,380 $ 56,806 China Merchants Bank December 2025 December 2026 2.11%-2.28% RMB500,000 RMB320,192 $ 71,150 $ 45,563 Bank of China September 2025 September 2026 2.30%-2.62% RMB400,000 RMB340,734 $ 56,920 $ 48,487 Industrial and Commercial Bank of China November 2024 November 2027 2.25 % RMB300,000 RMB299,195 $ 42,690 $ 42,576 China Merchants Bank (3) November 2020 Repayable by installments and the last installments repayable in November 2030 2.95 % RMB128,500 RMB69,676 $ 18,080 $ 9,915 Agricultural Bank of China April 2024 Repayable by installments and the last installments repayable in April 2034 2.43%-2.78% RMB300,000 RMB295,204 $ 42,690 $ 42,008 Bank of Shanghai June, 2025 June, 2026 2.11 % RMB100,000 NIL $ 14,230 $ — China CITIC Bank August 2023 September 2026 2.11 % RMB100,000 RMB100,059 $ 14,230 $ 14,238 $ 373,830 $ 288,053 (1) Converted from RMB to dollars as of December 31, 2025.
Risk Factors—Risks Related to Our Business and Our Industry—Our quarterly operating results can be difficult to predict and can fluctuate substantially, which could result in volatility in the price of Class A common stock.” It is difficult to predict accurately when, or even if, we can complete a sale of a tool to a potential customer or to increase sales to any existing customer.
Risk Factors—Risks Related to Our Business and Our Industry—Our quarterly operating results can be difficult to predict and can fluctuate substantially, which could result in volatility in the price of our Class A common stock.” It is difficult to predict accurately when, or even if, we can complete a sale of a tool to a potential customer or to increase sales to any existing customer.
The rates at which we add customers and install tools will affect the level and time of this spending. In addition, because we often import components and spare parts from various foreign countries, we have experienced, and expect to continue to experience, the effect of the currency fluctuations on our cost of revenue.
The rates at which we add customers and install tools will affect the level and time of this spending. In addition, because we often import components and spare parts from various foreign countries, we have experienced, and expect to continue to experience, the effect of currency fluctuations on our cost of revenue.
Stock-based compensation expense, when recognized, is charged to cost of revenue or to the category of operating expense corresponding to the service function of the employee or non-employee. • We also grant discounts to employee s when they subscribe for the new shares o f ACM Shanghai.
Stock-based compensation expense, when recognized, is charged to cost of revenue or to the category of operating expense corresponding to the service function of the employee or non-employee. • We also grant discounts to employee s when they subscribe for new shares o f ACM Shanghai.
Critical Accounting Policies and Estimates In preparing our consolidated financial statements in conformity with GAAP, we make assumptions, judgments and estimates in applying our accounting policies that can have a significant impact on our revenue, operating income and net income, as well as on the value of certain assets and liabilities on our consolidated balance sheets.
Critical Accounting Estimates In preparing our consolidated financial statements in conformity with GAAP, we make assumptions, judgments and estimates in applying our accounting policies that can have a significant impact on our revenue, operating income and net income, as well as on the value of certain assets and liabilities on our consolidated balance sheets.
Other income (expense), net primarily reflects (a) gains or losses recognized from the impact of exchange rates on our foreign currency-denominated working-capital transactions and (b) government subsidies, as described under “—Government Research and Development Funding” above.
Other (expense) income, net primarily reflects (a) gains or losses recognized from the impact of exchange rates on our foreign currency-denominated working-capital transactions and (b) government subsidies, as described under “—Government Research and Development Funding” above.
Our four mainland China subsidiaries, ACM Shanghai, ACM Wuxi, ACM Beijing, and ACM Lingang, are liable for mainland China corporate income taxes at the rates of 15%, 25%, 25%, and 15%, respectively.
Our four mainland China subsidiaries, ACM Shanghai, ACM Wuxi, ACM Beijing, and ACM Lingang, are liable for mainland China corporate income taxes at the rates of 15%, 25%, 25%, and 25%, respectively.
If the total tax revenue of the project fails to reach but is no less than 80% of the standard agreed under the Grant Agreement, ACM Lingang shall pay 20% of the actual shortfall amount of the tax revenue as liquidated damages.
If the total tax revenue of the project fails to reach, but is no less than, 80% of the standard amount agreed under the Grant Agreement, ACM Lingang shall pay 20% of the actual shortfall amount of the tax revenue as liquidated damages.
Risk Factors–Regulatory Risks–Mainland China’s currency exchange control and government restrictions on investment repatriation may impact our ability to transfer funds outside of mainland China, which could materially and adversely affect our ability to grow, make investments or acquisitions that could benefit our business, otherwise fund and conduct our business, or pay dividends on our common stock.” For the years ended December 31, 2024, 2023, and 2022, with the exception of sales and services-related transfer-pricing payments in the ordinary course of business, and dividends paid by ACM Shanghai to ACM Research, no transfers or distributions have been made between ACM Research, and its subsidiaries, including ACM Shanghai, or to holders of ACM Research Class A common stock.
Risk Factors–Regulatory Risks–Mainland China’s currency exchange control and government restrictions on investment repatriation may impact our ability to transfer funds outside of mainland China, which could materially and adversely affect our ability to grow, make investments or acquisitions that could benefit our business, otherwise fund and conduct our business, or pay dividends on our common stock.” For the years ended December 31, 2025, 2024, and 2023, with the exception of sales and services-related transfer-pricing payments in the ordinary course of business, and dividends paid by ACM Shanghai to ACM Research, no transfers or distributions have been made between ACM Research, and its subsidiaries, including ACM Shanghai, or to holders of ACM Research Class A common stock.
In addition to the milestones, covenants in the current Agreement require that, among other things, ACM Lingang will be required to pay liquidated damages in the event that within seven years after the Delivery Date, or prior to July 9, 2027, it does not (i) generate a minimum specified amount of annual sales of products manufactured on the granted land or (ii) pay at least RMB 157.6 million ($22.2 million) in annual total taxes (including value-added taxes, corporate income tax, personal income taxes, urban maintenance and construction taxes, education surcharges, stamp taxes, and vehicle and shipping taxes) as a result of operations in connection with the granted land.
In addition to the milestones, covenants in the Grant Agreement require that, among other things, ACM Lingang will be required to pay liquidated damages in the event that within seven years after the Delivery Date, or prior to July 9, 2027, it does not (i) generate a minimum specified amount of annual sales of products manufactured on the granted land or (ii) pay at least RMB 157.6 million ($22.2 million) in annual total taxes (including value-added taxes, corporate income tax, personal income taxes, urban maintenance and construction taxes, education surcharges, stamp taxes, and vehicle and shipping taxes) as a result of operations in connection with the granted land.
We expect that, for the foreseeable future, sales and marketing expense will increase in absolute dollars, as we continue to invest in sales and marketing by hiring additional employees and expanding marketing programs in existing or new markets. We must invest in sales and marketing processes in order to develop and maintain close relationships with customers.
We expect that, for the foreseeable future, sales and marketing expense will increase in absolute dollars, as we continue to invest in sales and marketing by hiring additional employees and expanding marketing programs in existing or new markets. We must invest in sales and marketing processes to develop and maintain close relationships with customers.
Some of these limitations are: • adjusted EBITDA excludes depreciation and amortization and, although these are non-cash expenses, the assets being depreciated or amortized may have to be replaced in the future; • we exclude stock-based compensation expense from adjusted EBITDA and adjusted operating income (loss), although (a) it has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy and (b) if we did not pay out a portion of our compensation in the form of stock-based compensation, the cash salary expense included in operating expenses would be higher, which would affect our cash position; • the expenses and other items that we exclude in our calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from adjusted EBITDA when they report their operating results; • adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; • adjusted EBITDA does not reflect interest expense, or the requirements necessary to service interest or principal payments on debt; • adjusted EBITDA does not reflect income tax expense (benefit) or the cash requirements to pay taxes; • adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; • although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect any cash requirements for such replacements; and • adjusted EBITDA includes expense reductions and non-operating other income attributable to mainland China governmental grants, which may mask the effect of underlying developments in net income, including trends in current expenses and interest expense, and free cash flow includes the mainland China governmental grants, the amount and timing of which can be difficult to predict and are outside our control.
Some of these limitations are: • adjusted EBITDA excludes depreciation and amortization and, although these are non-cash expenses, the assets being depreciated or amortized may have to be replaced in the future; 66 Table of C ontents • we exclude stock-based compensation expense from adjusted EBITDA and adjusted operating income (loss), although (a) it has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy and (b) if we did not pay out a portion of our compensation in the form of stock-based compensation, the cash salary expense included in operating expenses would be higher, which would affect our cash position; • the expenses and other items that we exclude in our calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from adjusted EBITDA when they report their operating results; • adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; • adjusted EBITDA does not reflect interest expense, or the requirements necessary to service interest or principal payments on debt; • adjusted EBITDA does not reflect income tax expense (benefit) or the cash requirements to pay taxes; • adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; • although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect any cash requirements for such replacements; and • adjusted EBITDA includes expense reductions and non-operating other income attributable to mainland China governmental grants, which may mask the effect of underlying developments in net income, including trends in current expenses and interest expense, and free cash flow includes the mainland China governmental grants, the amount and timing of which can be difficult to predict and are outside our control.
We are making dollar-based investments in order to support growth of our customer base in the United States, and the relative strength of the dollar could have a significant effect on our sales and marketing expense.
We are making dollar-based investments to support the growth of our customer base in the United States, and the relative strength of the dollar could have a significant effect on our sales and marketing expense.
How We Evaluate Our Operations We present information below with respect to four measures of financial performance: • We define “shipments” of tools to include (a) a “repeat” delivery to a customer of a type of tool that the customer has previously accepted, for which we recognize revenue upon delivery, and (b) a “first-time” delivery of a “first 74 Table of Contents tool” to a customer on an approval basis, for which we may recognize revenue in the future if contractual conditions are met, or if a purchase order is received. • We define “adjusted EBITDA” as net income excluding interest expense (net), income tax benefit (expense), depreciation and amortization, unrealized (gain) loss on short-term investments, and stock-based compensation.
How We Evaluate Our Operations We present information below with respect to four measures of financial performance: • We define “shipments” of tools to include (a) a “repeat” delivery to a customer of a type of tool that the customer has previously accepted, for which we recognize revenue upon delivery, and (b) a “first-time” delivery of a “first tool” to a customer on an approval basis, for which we may recognize revenue in the future if contractual conditions are met, or if a purchase order is received. • We define “adjusted EBITDA” as net income excluding interest expense (net), income tax benefit (expense), depreciation and amortization, unrealized (gain) loss on short-term investments, and stock-based compensation.
The fair value of stock options is determined using the Black-Scholes valuation model when there are service and performance condition attached, or the Monte Carlo valuation model when there is market condition attached.
The fair value of stock options is determined using the Black-Scholes valuation model when there are service and performance condition attached, or the Monte Carlo valuation model when there is a market condition attached.
Risk Factors—Risks Related to Our Business and Our Industry—Difficulties in forecasting demand for our tools may lead to periodic inventory shortages or excess spending on inventory items that may not be used.” Cost of Revenue Cost of revenue fo r capital equipment consis ts primarily of: • direct costs, which consist principally of costs of tool components and subassemblies purchased from third-party vendors; • compensation of personnel associated with our manufacturing operations, including stock-based compensation; • depreciation of manufacturing equipment; • amortization of costs of software used for manufacturing purposes; • other expenses attributable to our manufacturing department; • inventory provision; and • allocated overhead for rent and utilities.
Risk Factors—Risks Related to Our Business and Our Industry—Difficulties in forecasting demand for our tools may lead to periodic inventory shortages or excess spending on inventory items that may not be used.” Cost of Revenue Cost of revenue fo r capital equipment consis ts primarily of: • direct costs, which consist principally of costs of tool components and subassemblies purchased from third-party vendors; • compensation of personnel associated with our manufacturing operations, including stock-based compensation; • depreciation of manufacturing equipment; • other expenses attributable to our manufacturing department; • inventory provision; and • allocated overhead for rent and utilities.
Sales cycles for orders that require limited customization and do not require that we develop new technology usually take from 6 to 12 months, while the product life cycle, including the initial design, demonstration and final assembly phases, for orders requiring development and testing of new technologies can take as long as 2 to 4 years.
Sales cycles for orders that require limited configuration and do not require that we develop new technology usually take from 6 to 12 months, while the product life cycle, including the initial design, demonstration and final assembly phases, for orders requiring development and testing of new technologies can take as long as 2 to 4 years.
Our effective tax rate differs from statutory rates of 21% for U.S. federal income tax purposes and 12.5% to 25% for mainland China income tax purposes due to the effects of the valuation allowance and certain permanent differences as it pertains to book-tax differences in the treatment of stock-based compensation and non-U.S. research expenses.
Our effective tax rate differs from statutory rates of 21% for U.S. federal income tax purposes and 25% for mainland China income tax purposes due to the effects of the valuation allowance and certain permanent differences as it pertains to book-tax differences in the treatment of stock-based compensation and non-U.S. research expenses.
Key Components of Results of Operations Revenue We develop, manufacture and sell innovative capital equipment to the global semiconductor industry. Since we sell tools to a small number of customers and we customize those tools to fulfill the customers’ specific requirements, our revenue generation fluctuates, depending on the length of the sales, development and evaluation phases: • Sales and Development.
Key Components of Results of Operations Revenue We develop, manufacture and sell innovative capital equipment to the global semiconductor industry. Since we sell tools to a small number of customers and we configure those tools to fulfill the customers’ specific requirements, our revenue generation fluctuates, depending on the length of the sales, development and evaluation phases: • Sales and Development.
Sales and marketing expense can be significant and may fluctuate, in part because of the resource-intensive nature of our sales efforts and the length and variability of our sales cycle. The length of our sales cycle, from initial contact with a customer to the execution of a purchase order, is generally 6 to 24 months.
Sales and marketing expense can be significant and may fluctuate, in part because of the resource-intensive nature of our sales efforts and the length and variability of our sales cycle. The length of our sales cycle, from initial contact with a customer to the fulfilling purchase order, is generally 6 to 24 months.
For example, our Ultra C models for SAPS, TEBO, Tahoe and other solutions use common modular configurations that enable us to create a wet-cleaning tool meeting a customer’s specific requirements, while using pre-existing designs for chamber, electrical, chemical delivery and other modules. Because of the relatively high purchase prices of our tools, customers generally pay in installments.
For example, our Ultra C models for SAPS, TEBO, Tahoe and other solutions use common modular configurations that enable us to create a wet-cleaning tool meeting a customer’s specific requirements, while using pre-existing designs for chamber, electrical, chemical delivery and other modules. 51 Table of C ontents Because of the relatively high purchase prices of our tools, customers generally pay in installments.
During the year ended December 31, 2024, we funded our technology development and operations principally through our beginning global cash balances, including the cash balances at ACM Shanghai, borrowings by ACM Shanghai from local financial institutions and our loan from China CITIC Bank.
During the year ended December 31, 2025, we funded our technology development and operations principally through our beginning global cash balances, including the cash balances at ACM Shanghai, borrowings by ACM Shanghai from local financial institutions and our loan from China CITIC Bank.
There are a number of limitations related to the use of shipments in evaluating our business, including that customers have significant, or in some cases total, discretion in determining whether to accept or purchase our tools after evaluation and their decision not to accept or purchase delivered tools is likely to result in our inability to 75 Table of Contents recognize revenue from the delivered tools.
There are a number of limitations related to the use of shipments in evaluating our business, including that customers have significant, or in some cases total, discretion in determining whether to accept or purchase our tools after evaluation and their decision not to accept or purchase delivered tools is likely to result in our inability to recognize revenue from the delivered tools.
See “Part II. Item 1A – Risk Factors – Regulatory Risks – Our ability to sell our tools to customers in mainland China has been impacted, and will likely continue to be materially and adversely impacted, by export license requirements, other regulatory changes, or other actions taken by the U.S. or other governmental agencies” for more information.
Item 1A – Risk Factors – Regulatory Risks – Our ability to sell our tools to customers in mainland China has been impacted, and will likely continue to be materially and adversely impacted, by export license requirements, other regulatory changes, or other actions taken by the U.S. or other governmental agencies” for more information.
Under current regulations, if ACM Research were to be included on the Conclusive List 53 Table of Contents for two consecutive years due to our independent auditor being located in a jurisdiction that does not allow for PCAOB inspections, the SEC would prohibit trading in our securities and this ultimately could cause our securities to be delisted in the U.S., and their value may significantly decline or become worthless.
Under current regulations, if ACM Research were to be included on the Conclusive List for two consecutive years due to our independent auditor being located in a jurisdiction that does not allow for PCAOB inspections, the SEC would prohibit trading in our securities and this ultimately could cause our securities to be delisted in the U.S., and their value may significantly decline or become worthless.
Ernst & Young Hua Ming LLP, or E&Y our independent registered public accounting firm for the fiscal year ended December 31, 2024, is based in mainland China.
Ernst & Young Hua Ming LLP, or E&Y our independent registered public accounting firm for the fiscal year ended December 31, 2025, is based in mainland China.
The amendment expands the scope of export controls to prohibit (1) exporting twenty-three additional categories of items relating to semiconductor manufacturing and (2) providing technology relating to manufacturing, development or use of these categories of items, in both cases, without an advance license.
The amendment expands the scope of export controls to prohibit (1) exporting 23 additional categories of items relating to semiconductor manufacturing and (2) providing technology relating to manufacturing, development or use of these categories of items, in both cases, without an advance license.
We actively manage our operations through principles of operational excellence designed to 57 Table of Contents ensure continuing improvement in the efficiency and quality of our manufacturing operations by, for example, implementing factory constraint management and change control and inventory management systems.
We actively manage our operations through principles of operational excellence designed to ensure continuing improvement in the efficiency and quality of our manufacturing operations by, for example, implementing factory constraint management and change control and inventory management systems.
Fabricators of advanced integrated circuits, or chips, can use our wet-cleaning and other front-end processing tools in numerous steps to 52 Table of Contents improve product yield, even at increasingly advanced process nodes. We have designed these tools for use in fabricating foundry, logic and memory chips, including DRAM 3D NAND-flash memory chips, power semiconductor and compound semiconductor chips.
Fabricators of advanced integrated circuits, or chips, can use our wet-cleaning and other front-end processing tools in numerous steps to improve product yield, even at increasingly advanced process nodes. We have designed these tools for use in fabricating foundry, logic and memory chips, including DRAM 3D NAND-flash memory chips, power semiconductor and compound 48 Table of C ontents semiconductor chips.
In addition, our purchasing department actively seeks to identify and negotiate supply contracts with improved pricing to reduce cost of revenue. A significant portion of our raw materials are denominated in the RMB, while the majority of our purchase orders from customers are denominated in U.S. dollars.
In addition, our purchasing department actively seeks to identify and negotiate supply contracts with improved pricing to reduce cost of revenue. 52 Table of C ontents A significant portion of our raw materials are denominated in the RMB, while the majority of our purchase orders from customers are denominated in U.S. dollars.
Net cash used in investing activities for the year ended December 31, 2024, excluding net cash proceeds from the sale of time deposits, was $103.8 million, primarily consisting of $85.9 million purchase of property and equipment and intangible assets, and $24.9 million purchase of long-term investments (note 13) and $1.4 million purchase of equity investments, partly offset by $8.4 million net proceeds from the sale of short-term investments.
Net cash used in investing activities for the year ended December 31, 2024, excluding time deposits and long-term investment activities, was $103.8 million, primarily consisting of $85.9 million for purchases of property and equipment and intangible assets, $24.9 million for purchases of long-term investments and $1.4 million for purchases of equity investments, partly offset by $8.4 million of net proceeds from the sale of short-term investments.
In addition, the U.S. government imposed new restrictions by which U.S. persons anywhere in the world are effectively barred from engaging in certain activities related to the development and production of certain semiconductors at mainland China fabrication facilities meeting specified criteria, even if no items subject to the U.S. Export Administration Regulations (EAR) are involved.
In addition, BIS imposed new restrictions by which U.S. persons anywhere in the world are effectively barred from engaging in certain activities related to the development and production of semiconductors at mainland China fabrication facilities meeting specified criteria, even if no items subject to the EAR are involved.
Neither ACM Research, nor ACM Shanghai or any of our other subsidiaries, has any direct relationship with any mainland China government agency, and our anticipated cash needs for the next twelve months neither anticipate, nor require, receipt of any mainland China government grants or subsidies.
Neither ACM Research, nor ACM Shanghai or any of our other subsidiaries, 61 Table of C ontents has any direct relationship with any mainland China government agency, and our anticipated cash needs for the next twelve months neither anticipate, nor require, receipt of any mainland China government grants or subsidies.
The loan from China Merchants Bank is secured by a pledge of the property of ACM Lingang and guaranteed by ACM Shanghai, as described above under “—Contractual Obligations.” (2) This China CITIC bank facility agreement is with ACM Research, Inc. Effect of exchange rate changes on cash, cash equivalents and restricted cash.
(2) This China CITIC bank facility agreement is with ACM Research, Inc. 64 Table of C ontents (3) The loan from China Merchants Bank is secured by a pledge of the property of ACM Lingang and guaranteed by ACM Shanghai, as described above under “—Contractual Obligations.” Effect of exchange rate changes on cash, cash equivalents and restricted cash.
We are not party to any long-term purchasing agreements with suppliers. Please see “Item 1A.
We are not generally party to long-term purchasing agreements with suppliers. Please see “Item 1A.
ACM Shanghai has historically participated in certain mainland China government-sponsored grant and subsidy programs, as described under “—Key Components of Results of Operations—mainland China Government Research and Development Funding” and “—Contractual Obligations” and we expect that ACM Shanghai will continue to take advantage of these programs when they are available and fit with our business strategy.
ACM Shanghai has h istorically participated in certai n mainland China government-sponsored grant and subsidy programs, as described under “—Key Components of Results of Operations—mainland China Government Research and Development Funding” and “—Contractual Obligations” and we expect that ACM Shanghai will continue to take advantage of these programs when they are available and fit with our business strategy.
ACM and ACM Shanghai have implemented modifications to their existing business policies and practices in response to the October 2022 restrictions, including by imposing limitations on the activities of their U.S. persons and undertaking measures in connection with their supply chains more broadly to comply with the new regulations.
ACM and ACM Shanghai have implemented modifications to their existing business policies and practices in response to these enhanced export restrictions, including by imposing limitations on the activities of their U.S. persons and undertaking measures in connection with their supply chains more broadly to comply with the new regulations.
ACM Research intends to use the net proceeds for working capital and general corporate purposes.
ACM Research intends to use the dividend proceeds for working capital and general corporate purposes.
Government subsidies related to VAT reduction are credited to income in the period received. F or the years ended December 31, 2024, 2023, and 2022, related government subsidies recognized as other income in the consolidated statements of comprehensive income (loss) were $2.0 million, $0.4 million, and $0.3 million, respectively.
Government subsidies related to VAT reduction are credited to other income in the period received. F or the years ended December 31, 2025, 2024, and 2023, related government subsidies recognized as other income in the consolidated statements of comprehensive income were $1.4 million, $2.0 million, and $0.4 million, respectively.
The sales price of a particular tool will vary depending upon the required specifications. We have designed equipment models using a modular configuration that we customize to meet customers’ technical specifications.
The sales price of a particular tool will vary depending upon the required specifications. We have designed equipment models using a modular platform that we configure to meet customers’ technical specifications.
However, it remains to be seen whether the Japanese government will authorize any exports of these items to mainland China by a limited general license or specific license, if at all. On June 30, 2023, the Government of the Netherlands published additional export control measures for advanced semiconductor manufacturing equipment.
However, it remains to be seen whether the Japanese government will authorize any exports of these items to mainland China by a limited general license or specific license, if at all. 50 Table of C ontents Likewise, on September 30, 2023, the Government of the Netherlands published additional export control measures for advanced semiconductor manufacturing equipment.
Without reduction by grant amounts received from mainland China governmental authorities (see “—mainland China Government Research and Development Funding”), gross research and development expense totaled $105.9 million, or 13.6% of total revenue, in the year ended December 31, 2024 as compared to $94.5 million, or 16.9% of revenue, in the corresponding period in 2023.
Without reduction by grant amounts received from mainland China governmental authorities (see “—mainland China Government Research and Development Funding”), gross research and development expense totaled $152.9 million, or 17.0% of total revenue, in the year ended December 31, 2024 as compared to $105.9 million, or 13.5% of revenue, in the corresponding period in 2024.
If we did not pay out a portion of our compensation in the form of stock-based compensation, the cash salary expense included in 77 Table of Contents operating expenses would be higher and our cash holdings would be less.
If we did not pay out a portion of our compensation in the form of stock-based compensation, the cash salary expense included in 68 Table of C ontents operating expenses would be higher and our cash holdings would be less.
The increased tax expense in 2024 primarily resulted from the tax effect of increased operating profit generated. 67 Table of Contents As we collect and prepare necessary data, and interpret the guidance issued by the U.S. Treasury Department, the Internal Revenue Service, and other standard-setting bodies, we may make adjustments to the provisional amounts.
The decreased tax expense in 2025 primarily resulted from the tax effect of decreased operating profit generated. As we collect and prepare necessary data, and interpret the guidance issued by the U.S. Treasury Department, the Internal Revenue Service, and other standard-setting bodies, we may make adjustments to the provisional amounts.
Sales and Marketing Sales and marketing expense consists primarily of: • compensation of personnel associated with pre- and after-sales support and other sales and marketing activities, including stock-based compensation; • sales commissions paid to independent sales representatives; • fees paid to sales consultants; • cost of trade shows; • cost of promotional tools to potential new customers; • travel and entertainment; and • allocated overhead for rent and utilities.
Sales and Marketing Sales and marketing expense consists primarily of: • compensation of personnel associated with pre-sale and after-sale services and support and other sales and marketing activities, including stock-based compensation; • sales commissions paid to independent sales representatives; • fees paid to sales consultants; • cost of trade shows; • costs of tools built for promotional purposes for potential new customers; • travel and entertainment; and • rent and utilities.
Risk Factors—Regulatory Risks— Our operations in mainland China and Korea, including the import of components, 54 Table of Contents technology, and activities of U.S. personnel therein, may be further impacted by the addition of ACM Shanghai, ACM Korea and related entities to the BIS Entity List ” of this report for more information. Restrictions Imposed by the U.S.
Risk Factors—Regulatory Risks—Our operations in mainland China and Korea, including the import of components, technology, and activities of U.S. personnel therein, may be further impacted by the addition of ACM Shanghai, ACM Korea and related entities to the BIS Entity List” of this report for more information.
Research and development expense represented 13.5% and 16.6% of our revenue in the years ended December 31, 2024 and 2023, respectively.
Research and development expense represented 16.1% and 13.5% of our revenue in the years ended December 31, 2025 and 2024, respectively.
Research and development expense increased in 2024 as compared to 2023, reflecting an increase of $10.1 million for personnel-related costs, an increase of $5.7 million in stock-based compensation, and an increase of $3.7 million in travel and entertainment and other costs to support product development, offset by a $5.5 million decrease in supplies and spares used in product development activities and a $1.2 million decrease in expenses for outside services.
Research and development expense increased $12.8 million in 2024 as compared to 2023, reflecting increases of $10.1 million for personnel costs, $5.7 million in stock-based compensation, and $3.7 million in travel and entertainment and other costs to support product development, offset by decreases of $5.5 million in supplies and spares used in product development activities and a $1.2 million for outside services.
The uses of cash are offset by the following significant sources of cash: an increase in advances from customers of $67.1 (Note 3), an increase in other payables and accrued expenses of $23.2 million, an increase in FIN-48 and income taxes payable of $13.7 m illion, and an increase in accounts payable of $1.4 million.
The uses of cash are offset by the following significant sources of cash: an increase in advances from customers of $67.1, an increase in other payables and accrued expenses of $23.2 million, an increase in FIN-48 and income taxes payable of $13.7 million, and an increase in accounts payable of $1.4 million. Cash Flow Used in Investing Activities.
First tool shipments for the years ended December 31, 2024, 2023, and 2022 totaled $468 million, $286 million, and $251 million, respectively.
First tool shipments for the years ended December 31, 2025, 2024, and 2023 totaled $388 million, $468 million, and $286 million, respectively.
Net Income Attributable to Non-Controlling Interests Year Ended December 31, 2024 2023 2022 % Change 2024 v 2023 % Change 2023 v 2022 (in thousands) Net income attributable to non-controlling interests $ 27,642 $ 19,503 $ 11,301 41.7 % 72.6 % ACM Research owns 81.5% of ACM Shanghai’s (note 1) outstanding shares which is reflected in our consolidated financial statements (note 2).
Net Income Attributable to Non-Controlling Interests Year Ended December 31, 2025 2024 2023 % Change 2025 v 2024 % Change 2024 v 2023 (in thousands) Net income attributable to non-controlling interests $ 27,815 $ 27,642 $ 19,503 0.6 % 41.7 % ACM Research owns 74.6% of ACM Shanghai’s (note 1) outstanding shares which is reflected in our consolidated financial statements (note 2).
Based on our experience with repeat sales of our tools, we expect that we will receive an initial payment upon delivery of a tool in connection with a repeat purchase, with the balance being paid after the tool has been tested and accepted by the customer.
Based on our experience with repeat sales of our tools, we expect that we will receive an initial payment upon delivery of a tool in connection with a repeat purchase, with the balance being paid after the tool has been tested and accepted by the customer. Our sales arrangements for repeat purchases do not include a general right of return.
Those adjustments may materially affect our provision for income taxes and effective tax rate in the period in which the adjustments are made.
Those 59 Table of C ontents adjustments may materially affect our provision for income taxes and effective tax rate in the period in which the adjustments are made.
We intend to retain all available funds and any future earnings to support the operation of and to finance the growth and development of our business and do not anticipate paying any cash dividends in the foreseeable future. Cash Flow Provided by (Used in) Operating Activities.
We intend to retain all available funds and any future earnings to support the operation of and to finance the growth and development of our business and do not anticipate paying any cash dividends in the foreseeable future. 62 Table of C ontents Cash Flow from Operating Activities.
Year Ended December 31, 2024 2023 2022 Revenue 100.0 % 100.0 % 100.0 % Cost of revenue 49.9 50.5 52.8 Gross margin 50.1 49.5 47.2 Operating expenses: Sales and marketing 8.4 8.4 10.3 Research and development 13.5 16.6 16.0 General and administrative 8.9 7.3 5.8 Total operating expenses, net 30.8 32.3 32.0 Income from operations 19.3 17.2 15.2 Interest income, net 0.7 1.0 1.8 Realized gain from sale of short-term investments 0.2 1.6 0.3 Unrealized gain (loss) on short-term investments 0.1 -0.5 -2.0 Other income (expense), net 0.8 -0.3 0.9 Income from equity method investments 0.1 1.8 1.2 Income before income taxes 21.2 20.8 17.4 Income tax expense -4.5 -3.5 -4.3 Net income 16.7 17.3 13.0 Less: Net income attributable to non-controlling interests 3.5 3.5 2.9 Net income attributable to ACM Research, Inc. 13.2 % 13.8 % 10.1 % Comparison of Years Ended December 31, 2024, 2023, and 2022 Revenue Year Ended December 31, 2024 2023 2022 % Change 2024 v 2023 % Change 2023 v 2022 (in thousands) Single wafer cleaning, Tahoe and semi-critical cleaning equipment $ 578,887 $ 403,851 $ 272,939 43.3 % 48.0 % ECP (front-end and packaging), furnace and other technologies 151,057 103,356 77,482 46.2 % 33.4 % Advanced packaging (excluding ECP), services & spares 52,174 50,516 38,411 3.3 % 31.5 % Total Revenue By Product Category $ 782,118 $ 557,723 $ 388,832 40.2 % 43.4 % 63 Table of Contents Year Ended December 31, 2024 2023 2022 (in thousands) Mainland China $ 775,752 $ 540,969 $ 377,752 Other Regions 6,366 16,754 11,080 $ 782,118 $ 557,723 $ 388,832 The increase in revenue for 2024 compared to 2023 was driven by higher sales of single wafer cleaning, Tahoe and semi-critical cleaning equipment, ECP (front-end and packaging), furnace and other technologies, and advanced packaging (excluding ECP), services & spares.
Year Ended December 31, 2025 2024 2023 Revenue 100.0 % 100.0 % 100.0 % Cost of revenue 55.6 49.9 50.5 Gross margin 44.4 50.1 49.5 Operating expenses: Sales and marketing 8.5 8.4 8.4 Research and development 16.1 13.5 16.6 General and administrative 7.6 8.9 7.3 Total operating expenses, net 32.2 30.8 32.3 Income from operations 12.2 19.3 17.2 Interest income, net 0.9 0.7 1.0 Realized gain from sale of short-term investments — 0.2 1.6 Unrealized gain (loss) on short-term investments 1.9 0.1 (0.5) Other (expense) income, net (1.1) 0.8 (0.3) Income from equity method investments 1.1 0.1 1.8 Income before income taxes 15.0 21.2 20.8 Income tax expense (1.5) (4.5) (3.5) Net income 13.5 16.7 17.3 Less: Net income attributable to non-controlling interests 3.1 3.5 3.5 Net income attributable to ACM Research, Inc. 10.4 % 13.2 % 13.8 % 55 Table of C ontents Comparison of Years Ended December 31, 2025, 202 4, and 2023 Revenue Year Ended December 31, 2025 2024 2023 % Change 2025 v 2024 % Change 2024 v 2023 (in thousands) Single wafer cleaning, Tahoe and semi-critical cleaning equipment $ 625,964 $ 578,887 $ 403,851 8.1 % 43.3 % ECP (front-end and packaging), furnace and other technologies 199,551 151,057 103,356 32.1 % 46.2 % Advanced packaging (excluding ECP), services & spares 75,794 52,174 50,516 45.3 % 3.3 % Total revenue by product category $ 901,309 $ 782,118 $ 557,723 15.2 % 40.2 % Year Ended December 31, 2025 2024 2023 (in thousands) Mainland China $ 897,978 $ 775,752 $ 540,969 Other Regions 3,331 6,366 16,754 Total revenue by geographic region $ 901,309 $ 782,118 $ 557,723 The increase in revenue for 2025 compared to 2024 reflects higher sales of single wafer cleaning, Tahoe and semi-critical cleaning equipment, and ECP (front-end and packaging), furnace and other technologies and advanced packaging (excluding ECP), services and spares.
ACM Shanghai is continuing to assess the impact of the October 2023 changes, together with the October 2022 rules, and will continually adjust or modify its policies and practices as required to comply with these or other related updates.
ACM Shanghai is continuing to assess the impact of these export control restrictions, and will continually adjust or modify its policies and practices as required to comply with these or other related updates.
In general terms, the new BIS Entity List designations prohibit any party worldwide from furnishing hardware, software, or technologies that are subject to U.S. export controls jurisdiction to ACM Shanghai or ACM Korea. See “Item 1A.
In general terms, the new BIS Entity List designations prohibit any party worldwide from furnishing hardware, software, or technologies that are subject to U.S. export controls jurisdiction directly or indirectly to ACM Shanghai or ACM Korea without obtaining authorization. Restrictions Imposed by the U.S.
Liquidity and Capital Resources The following chart depicts our corporate organization as of December 31, 2024: A detailed description of how cash is transferred through our organization is set forth unde r “Note 2 – Summary of Significant Accounting Policies – Cash and Cash Equivalents” to the Consolidated Financial Statements of this report.
Liquidity and Capital Resources A detailed description of how cash is transferred through our organization is set forth under “note 2 – Summary of Significant Accounting Policies – Cash and Cash Equivalents” to the Consolidated Financial Statements of this report.
The increase in revenue for 2023 compared to 2022 was driven primarily by higher sales of single wafer cleaning, Tahoe and semi-critical cleaning equipment, and increased contribution from newer ECP (front-end and packaging), furnace and other technologies.
The increase in revenue for 2024 compared to 2023 was driven by higher sales of single wafer cleaning, Tahoe and semi-critical cleaning equipment, ECP (front-end and packaging), furnace and other technologies, and advanced packaging (excluding ECP), services & spares.
Adjusted operating income for the year ended December 31, 2023, as compared with the year ended December 31, 2022, increased by $56.4 million due to a $36.8 million increase in income from operations and a $19.6 million increase in stock-based compensation expense.
Adjusted operating income for the year ended December 31, 2024, as compared with the year ended December 31, 2023, increased by $77.4 million due to a $55.2 million increase in income from operations and a $22.2 million increase in stock-based compensation expense.
We recorded an unrealized gain on short-term investments of $1.0 million for the year ended December 31, 2024 as compared to an unrealized loss of $2.7 million for the same period in 2023, due primarily to a change in market value of ACM Shanghai’s indirect investment in publicly traded shares.
We recorded a realized gain on sale of short-term investments of $1.8 million for the year ended December 31, 2024 as compared to a realized gain of $9.0 million for the same period in 2023 primarily due to the sales of ACM Shanghai’s indirect investment in publicly traded shares in the 2023 fiscal year.
Shipments for the years ended December 31, 2024, 2023, and 2022 t otaled $973 million, $596 million, and $539 million, respectively. Repeat tool shipments in the years ended December 31, 2024, 2023, and 2022 totaled $505 million, $310 million, and $288 million, respectively.
Shipments for the years ended December 31, 2025, 2024, and 2023 totaled $854 million, $973 million, and $596 million, respectively. Repeat tool shipments in the years ended December 31, 2025, 2024, and 2023 totaled $466 million, $505 million, and $310 million, respectively.
Tax Benefit (Expense) Year Ended December 31, 2024 2023 2022 (in thousands) Current: U.S. federal $ (483) $ (12,757) $ (479) U.S. state (2) (150) (18) Foreign (29,120) (19,696) (11,139) Total current tax expense (29,605) (32,603) (11,636) Deferred: U.S. federal (5,244) 7,316 (10,927) U.S. state (63) 63 8 Foreign (119) 5,860 5,757 Total deferred tax benefit (expense) (5,426) 13,239 (5,162) Total income tax expense $ (35,031) $ (19,364) $ (16,798) We recognized a tax expense of $$35.0 million for the year ended December 31, 2024 as compared to a tax expense of $19.4 million for the prior year period.
Tax (expense) benefit Year Ended December 31, 2025 2024 2023 (in thousands) Current: U.S. federal $ (8,631) $ (483) $ (12,757) U.S. state (2) (2) (150) Foreign (19,632) (29,120) (19,696) Total current tax (expense) benefit (28,265) (29,605) (32,603) Deferred: U.S. federal 652 (5,244) 7,316 U.S. state — (63) 63 Foreign 14,314 (119) 5,860 Total deferred tax benefit (expense) 14,966 (5,426) 13,239 Total income tax benefit (expense) $ (13,299) $ (35,031) $ (19,364) We recognized a tax expense of $13.3 million for the year ended December 31, 2025 as compared to a tax expense of $35 million for the prior year period.
Interest income (expense), net, decreased in 2023 compared to 2022, principally as a result of reduced interest income from lower interest income on reduced cash balances, offset by increase in interest expenses incurred from a higher balance of total bank loans.
Interest income, net, increased slightly in 2024 compared to 2023, principally as a result of an increase in interest income due to increase in cash balances, offset by increase in interest expenses incurred from a higher balance of total bank loans.
We conduct a substantial majority of our product development, manufacturing, support and services in mainland China, with additional product development and subsystem production in Korea. Substantially all of our tools are built to order at our Chuansha manufacturing facilities in the Pudong region of Shanghai.
We conduct a substantial majority of our product development, manufacturing, support and services in mainland China, with additional product development and subsystem production in Korea. Substantially all of our tools are built to order at our Lingang manufacturing facilities in Shanghai. See “Item 2. Properties,” of Part I of this report.
Stock-Based Compensation Expense We grant stock options to employees and non-employee consultants and directors, and we account for those stock-based awards in accordance with ASC Topic 718, Compensation—Stock Compensation . • Stock-based awards granted to employees and non-employees are measured at the fair value of the awards on the grant date and are recognized as expenses either (a) immediately on grant, if no vesting conditions are required, or (b) using the graded vesting method, net of estimated forfeitures, over the requisite service period.
General and Administrative General and administrative expense consists primarily of: • compensation of executive, accounting and finance, human resources, information technology, and other administrative personnel, including stock-based compensation; • professional fees, including accounting and legal fees; • other corporate expenses; • credit losses; and • allocated overhead for rent and utilities. 53 Table of C ontents Stock-Based Compensation Expense We grant stock options to employees and non-employee consultants and directors, and we account for those stock-based awards in accordance with ASC Topic 718, Compensation—Stock Compensation . • Stock-based awards granted to employees and non-employees are measured at the fair value of the awards on the grant date and are recognized as expenses either (a) immediately on grant, if no vesting conditions are required, or (b) using the graded vesting method, net of estimated forfeitures, over the requisite service period.
ACM may not be able to import, or may face substantial restrictions in importing, certain parts from the United States or parts subject to U.S. export controls from outside the United States to support tool shipments to such facilities, or to be embedded into tools defined by affected ECCNs.
ACM Shanghai may not import, or faces substantial restrictions in importing, parts from the United States or parts subject to U.S. export controls from outside the United States to support tool shipments to such facilities.
These factors had an adverse impact on ACM Shanghai’s shipments and sales for the twelve months ended December 30, 2023. During the twelve months ended December 30, 2023, two prominent exporters of advanced semiconductor manufacturing equipment, the Netherlands and Japan, announced and began to implement plans to join the United States in imposing semiconductor-focused export controls.
Outside of the U.S., during the three and twelve months ended December 30, 2023, two prominent exporters of advanced semiconductor manufacturing equipment, the Netherlands and Japan, announced and began to implement plans to join the United States in imposing semiconductor-focused export controls.
Net cash provided by (used in) operations during the year ended December 31, 2024, 2023, and 2022 consisted of: Year Ended December 31, 2024 2023 2022 (in thousands) Net Income $ 131,269 $ 96,852 $ 50,564 Non-cash operating lease cost 3,815 3,580 2,816 Provision for inventory 2,796 575 2,248 Provision for credit losses 13,517 2,741 - Gain on disposals of property plant and equipment 945 (2) (12) Depreciation and amortization 9,967 8,092 5,366 Realized gain on short-term investments (1,788) (9,047) (1,116) Income from equity method investments (423) (9,952) (4,666) Unrealized (gain) loss on short-term investments (973) 2,737 7,855 Deferred income taxes 5,286 (13,647) 4,027 Stock-based compensation 49,576 27,338 7,730 Dividends from unconsolidated affiliates 1,529 — — Net changes in operating assets and liabilities: (63,066) (184,590) (137,006) Net cash flow provided by (used in) operating activities $ 152,450 $ (75,323) $ (62,194) Significant changes in operating asset and liability accounts during the year-ended December 31, 2024, 2023, and 2022 included the following uses of cash: increases of inve ntories of $64.1 million (Note 5), and an increase of accounts receivable of $123.3 million (Note 4).
Net cash (used in) provided by operating activities during the year ended December 31, 2025, 2024, and 2023 consisted of: Year Ended December 31, 2025 2024 2023 (in thousands) Net income $ 121,893 $ 131,269 $ 96,852 Non-cash operating lease cost 4,544 3,815 3,580 Provision for inventory 15,485 2,796 575 Provision for credit losses 14,498 13,517 2,741 Depreciation and amortization 16,328 9,967 8,092 Realized gain on short-term investments (112) (1,788) (9,047) Income from equity method investments (10,290) (423) (9,952) Unrealized (gain) loss on short-term investments (17,455) (973) 2,737 Deferred income taxes (14,375) 5,286 (13,647) Stock-based compensation 33,577 49,576 27,338 Others 1,309 945 (2) Dividends from unconsolidated affiliates 2,100 1,529 — Net changes in operating assets and liabilities (177,827) (63,066) (184,590) Net cash (used in) provided by operating activities $ (10,325) $ 152,450 $ (75,323) Significant changes in operating asset and liability accounts during the year-ended December 31, 2025 included the following uses of cash: an increase in inve ntories of $108.2 million (note 5), an increase in accounts receivable of $116.1 million (note 4), and a decrease in customer advances of $60.8 million (note 3).
For the years ended December 31, 2024, 2023, and 2022, related government subsidies recogn ized as reductions of relevant expenses in the consolidated statements of comprehensive income (loss) were $0.5 million, $1.7 million and $1.2 million, respectively. • Government subsidies related to depreciable assets are credited to income over the useful lives of the related assets for which the grant was received.
For the years ended December 31, 2025, 2024, and 2023, such credits to research & development expenses recognized in the consolidated statements of comprehensive income w ere $8.0 million , $0.5 million and $1.7 million, respectively. • Government subsidies related to depreciable assets are credited to other income over the useful lives of the related assets for which the grant was received.
Certain entities which meet requirements according to the Policy of the Lingang New area in China (Shanghai) Pilot Free Trade Zone are entitled to a preferential income tax rate of 15%. ACM Lingang was certified for this in 2021, and this preferential income tax rate is valid from January 1, 2020 until December 31, 2024.
ACM Shanghai was certified as an “advanced and new technology enterprise” in 2012 and again in 2016, 2018, 2021 and 2024, effective until December 31, 2026. Certain entities which meet requirements according to the Policy of the Lingang New area in China (Shanghai) Pilot Free Trade Zone are entitled to a preferential income tax rate of 15%.
General and administrative expense increased in 2024 as compared to 2023, reflecting an increase of $10.8 million in allowance for credit losses, $10.7 million in stock-based compensation, $3.1 million in personnel costs, professional services, and $4.3 million for travel & entertainment, depreciation and amortization, outside services, taxes and other general and administrative expenses.
General and administrative expense decreased $0.9 million in 2025 as compared to 2024, reflecting a $5.7 million decrease in stock-based compensation partially offset by increases of $3.6 million in personnel and professional services costs, $0.7 million in our allowance for credit losses, and $0.5 million in other costs related to general and administrative expenses. 57 Table of C ontents General and administrative expense increased $29.0 million in 2024 as compared to 2023, reflecting increases of $10.8 million in allowance for credit losses, $10.7 million in stock-based compensation, $3.1 million in personnel costs and professional services, and $4.4 million for travel & entertainment, depreciation and amortization, outside services, taxes and other general and administrative expenses.
The impact of fluctuations of the RMB to U.S. dollar currency exchange rate on a significant balance of our cash, and cash equivalents held in RMB-denominated accounts (Note 2) contributed t o a $4.8 million decrease in the value of these items during the year ended December 31, 2024.
The impact of fluctuations of the RMB to U.S. dollar currency exchange rate in RMB-denominated accounts (note 2) contributed to a $12.8 million increase in the value of these items during the year ended December 31, 2025.
Cash and cash equivalents, restricted cash, short-term time deposits and long-term time deposits wer e $441.9 million at December 31, 2024, compared to $304.5 million at December 31, 2023.
Cash and cash equivalents, restricted cash, short-term time deposits and long-term time deposits were $1,132.6 million at December 31, 2025, compared to $441.9 million at December 31, 2024.
Allowance for Credit Losses Accounts receivables are reflected in our consolidated balance sheets at their estimated collectible amounts. A substantial majority of our accounts receivable are derived from sales to large multinational semiconductor manufacturers in Asia.
Such estimates may differ from actual results, and these differences could have a material impact on the recorded inventory values. Allowance for Credit Losses Accounts receivables are reflected in our consolidated balance sheets at their estimated collectible amounts. A substantial majority of our accounts receivable are derived from sales to large multinational semiconductor manufacturers in Asia.
Our cash and cash equivalents at December 31, 2024 were held for working capital purposes and other potential investments. ACM Shanghai, our only direct mainland China subsidiary, is, however, subject to mainland China restrictions on distributions to equity holders. The use of proceeds raised by the STAR Market IPO, without further approvals, are limited to specific usage.
Our cash and cash equivalents at December 31, 2025 were held for working capital purposes and other potential investments. ACM Shanghai, our only direct mainland China subsidiary, is, however, subject to mainland China restrictions on distributions to equity holders.
Amo ng the 140 companies added to the BIS Entity List were two subsidiaries of ACM Research, ACM Shanghai, located in the People’s Republic of China, and ACM Korea, a direct subsidiary of ACM Shanghai, which is located in the Republic of Korea, and other related entities.
Entity List Effective on December 2, 2024, BIS promulgated a final rule naming a number of companies to the BIS Entity List Among the 140 companies added to the BIS Entity List were two subsidiaries of ACM Research, ACM Shanghai, located in the 49 Table of C ontents People’s Republic of China, and ACM Korea, a direct subsidiary of ACM Shanghai, which is located in the Republic of Korea, and other related entities.
The following tables reflect the exclusion of stock-based compensation, or SBC, from line items comprising income from operations: Year Ended December 31, 2024 2023 2022 Actual (GAAP) SBC Adjusted (Non-GAAP) Actual (GAAP) SBC Adjusted (Non-GAAP) Actual (GAAP) SBC Adjusted (Non-GAAP) (in thousands) Revenue $ 782,118 $ - $ 782,118 $ 557,723 $ - $ 557,723 $ 388,832 $ - $ 388,832 Cost of revenue (390,564) (2,385) (388,179) (281,508) (1,406) (280,102) (205,217) (520) (204,697) Gross profit 391,554 (2,385) 393,939 276,215 (1,406) 277,621 183,615 (520) 184,135 Operating expenses: Sales and marketing (65,447) (10,552) (54,895) (47,019) (5,684) (41,335) (39,889) (1,877) (38,012) Research and development (105,473) (14,112) (91,361) (92,709) (8,459) (84,250) (62,226) (2,565) (59,661) General and administrative (69,636) (22,527) (47,109) (40,648) (11,789) (28,859) (22,465) (2,768) (19,697) Income (loss) from operations $ 150,998 $ (49,576) $ 200,574 $ 95,839 $ (27,338) $ 123,177 $ 59,035 $ (7,730) $ 66,765 Adjusted operating income for the year ended December 31, 2024, as compared with the year ended December 31, 2023, increased by $77.4 million due to a $55.2 million increase in income from operations and a $22.2 million increase in stock-based compensation expense.
The following tables reflect the exclusion of stock-based compensation, or SBC, from line items comprising income from operations: Year Ended December 31, 2025 2024 2023 Actual (GAAP) SBC Adjusted (Non-GAAP) Actual (GAAP) SBC Adjusted (Non-GAAP) Actual (GAAP) SBC Adjusted (Non-GAAP) (in thousands) Revenue $ 901,309 $ - $ 901,309 $ 782,118 $ - $ 782,118 $ 557,723 $ - $ 557,723 Cost of revenue (501,242) (1,343) (499,899) (390,564) (2,385) (388,179) (281,508) (1,406) (280,102) Gross profit 400,067 (1,343) 401,410 391,554 (2,385) 393,939 276,215 (1,406) 277,621 Operating expenses: Sales and marketing (76,899) (6,629) (70,270) (65,447) (10,552) (54,895) (47,019) (5,684) (41,335) Research and development (144,989) (8,783) (136,206) (105,473) (14,112) (91,361) (92,709) (8,459) (84,250) General and administrative (68,750) (16,822) (51,928) (69,636) (22,527) (47,109) (40,648) (11,789) (28,859) Income (loss) from operations $ 109,429 $ (33,577) $ 143,006 $ 150,998 $ (49,576) $ 200,574 $ 95,839 $ (27,338) $ 123,177 Adjusted operating income for the year ended December 31, 2025, as compared with the year ended December 31, 2024, decreased by $57.6 million due to a $41.6 million decrease in income from operations and a $16.0 million decrease in stock-based compensation expense.
For additional information regarding our mainland China grants, please see “—Key Components of Results of Operations—mainland China Government Research and Development Funding.” Free Cash Flow The following table reconciles net cash provided by (used in) operating activities, the most directly comparable GAAP financial measure, to free cash flow: Year Ended December 31, 2024 2023 2022 % Change 2024 v 2023 Absolute Change 2024 v 2023 (in thousands) Free Cash Flow Data: Net cash generated by (used in) operating activities $ 152,450 $ (75,323) $ (62,194) -302.4 % $ 227,773 Purchase of property and equipment (82,463) (61,876) (91,094) 33.3 % (20,587) Purchase of short-term and long-term investments $ (26,264) $ (25,864) $ (4,279) 1.5 % (400) Free cash flow $ 43,723 $ (163,063) $ (157,567) -126.8 % $ 206,786 The changes in free cash flow for the years ended December 31, 2024, 2023, and 2022 reflected the factors driving net cash used in operating activities, and an increase of purchases of property and equipment.
For additional information regarding our mainland China grants, please see “—Key Components of Results of Operations—Mainland China Government Research and Development Funding.” 67 Table of C ontents Free Cash Flow The following table reconciles net cash from operating activities, the most directly comparable GAAP financial measure, to free cash flow: Year Ended December 31, 2025 2024 2023 % Change 2025 v 2024 Absolute Change 2025 v 2024 (in thousands) Free Cash Flow Data: Net cash (used in) provided by operating activities $ (10,325) $ 152,450 $ (75,323) (106.8) % $ (162,775) Purchases of property and equipment (56,283) (82,463) (61,876) (31.7) % 26,180 Purchases of short-term and long-term investments (484) (26,264) (25,864) (98.2) % 25,780 Free cash flow $ (67,092) $ 43,723 $ (163,063) (253.4) % $ (110,815) The changes in free cash flow for the years ended December 31, 2025, 2024, and 2023 reflect the factors driving net cash used in operating activities, purchases of property and equipment and purchases of short-term and long-term investments.
Cost of Revenue and Gross Margin Year Ended December 31, 2024 2023 2022 % Change 2024 v 2023 % Change 2023 v 2022 (in thousands) Cost of revenue $ 390,564 $ 281,508 $ 205,217 38.7 % 37.2 % Gross profit 391,554 276,215 183,615 41.8 % 50.4 % Gross margin 50.1 % 49.5 % 47.2 % 0.5 2.30 Cost of revenue and gross profit increased in 2024 as compared to 2023 due to the increased sales volume and an increase in gross margin.
Cost of Revenue and Gross Margin Year Ended December 31, 2025 2024 2023 % Change 2025 v 2024 % Change 2024 v 2023 (in thousands) Cost of revenue $ 501,242 $ 390,564 $ 281,508 28.3 % 38.7 % Gross profit 400,067 391,554 276,215 2.2 % 41.8 % Gross margin 44.4 % 50.1 % 49.5 % (570) bps 60 bps Cost of revenue and gross profit increased in 2025 as compared to 2024 due to the increased sales volume, partly offset by a decrease in gross margin.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe report the impact of foreign exchange fluctuations in the other income (expense) line item of our Consolidated Statements of Comprehensive Income (Loss) statements. For 2024, 2023, and 2022, the effect of fluctuations of foreign currencies contributed realized gains (losses) of $4.2 million, (2.0) million, and $1.7 million, respectively.
Biggest changeWe report the impact of foreign exchange fluctuations in the other (expense) income, net line item of our Consolidated Statements of 69 Table of C ontents Comprehensive Income statements. For 2025, 2024, and 2023, the effect of fluctuations of foreign currencies contributed realized gains (losses) of $(10.9 million), $4.2 million, and $(2.0 million), respectively.
Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transactions. Any difference between the initially recorded amount and the settlement amount is recorded as a gain or loss on foreign currency transaction in our consolidated statements of comprehensive income (loss).
Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transactions. Any difference between the initially recorded amount and the settlement amount is recorded as a gain or loss on foreign currency transaction in our consolidated statements of comprehensive income.
In accordance with ASC Topic 830, Foreign Currency Matters , we translate the assets and liabilities into U.S. dollars from RMB using the rate of exchange prevailing at the applicable balance sheet date and the consolidated statements of comprehensive income (loss) and cash flows are translated at an average rate during the reporting period.
In accordance with ASC Topic 830, Foreign Currency Matters, we translate the assets and liabilities into U.S. dollars from RMB using the rate of exchange prevailing at the applicable balance sheet date and the consolidated statements of comprehensive income and cash flows are translated at an average rate during the reporting period.
Adjustments resulting from the translation are recorded in stockholders’ equity as part of accumulated other comprehensive income (loss). The majority of our business is conducted through our ACM Shanghai subsidiary that manufactures and sells our products in various global markets, and we also have operations in Korea, the Taiwan Region, the United States, and other countries.
Adjustments resulting from the translation are recorded in stockholders’ equity as part of accumulated other comprehensive income. The majority of our business is conducted through our ACM Shanghai subsidiary that manufactures and sells our products in various global markets, and we also have operations in Korea, the Taiwan Region, the United States, and other countries.
The mainland China government imposes significant exchange restrictions on fund transfers out of mainland China that are not related to business operations. To date these restrictions have not had a material impact on us because we have not engaged in any significant transactions that are subject to the restrictions.
The mainland China government imposes significa nt exchange restrictions on fund transfers out of mainland China that are not related to business operations. To date these restrictions have not had a material impact on us because we have not engaged in any significant transactions that are subject to the restrictions.
For example, because of our significant manufacturing operations in mainland China, a weakening RMB is advantageous and a strengthening RMB is disadvantageous to our financial results. At this time, we have not established a formal hedging 78 Table of Contents policy to attempt to reduce the inherent risks of potential currency fluctuations on our global operations.
For example, because of our significant manufacturing operations in mainland China, a weakening RMB is advantageous and a strengthening RMB is disadvantageous to our financial results. At this time, we have not established a formal hedging policy to attempt to reduce the inherent risks of potential currency fluctuations on our global operations.
Interest Rate Risk As of December 31, 2024, 2023, and 2022, the balance of our short term bank borrowings (see note 8 in the Notes to Consolidated Financial Statements included herein under “Item 8. Financial Statements and Supplementary Data.”), mature at various dates within the following year and do not expose us to interest rate risk.
Interest Rate Risk As of December 31, 2025, 2024, and 2023, the balance of our short term bank borrowings (see note 8 in t he Notes to Consolidated Financial Statements included herein under “Item 8. Financial Statements and Supplementary Data.”), mature at various dates within the following year and do not expose us to interest rate risk.
We have implemented policies and procedures to measure, manage, monitor and report risk exposures, which are reviewed regularly by management and the board of directors. We identify risk exposures and monitor and manage such risks on an ongoing basis. 79 Table of Contents
We have implemented policies and procedures to measure, manage, monitor and report risk exposures, which are reviewed regularly by management and the board of directors. We identify risk exposures and monitor and manage such risks on an ongoing basis. 70 Table of C ontents
As of December 31, 2023, the balance of our long-term borrowings (see note 11 in the Notes to Consolidated Financial Statements included herein under “Item 8. Financial Statements and Supplementary Data.”) carries a fixed interest rated and we may be exposed to fair value interest rate risk.
As of December 31, 2025, the balance of our long-term borrowings (see note 10 in the Notes to Consolidated Financial Statements included herein under “Item 8. Financial Statements and Supplementary Da ta.”) carries a fixed interest rated and we may be exposed to fair value interest rate risk.

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