ACM Research, Inc.

Previous wording

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. In the three-months ended December 31, 2024, we began initial operations at our Lingang development and production center. The facility, when fully completed, is intended incorporate state-of-the-art manufacturing systems and automation technologies to expand our production capacity and support additional research and development activities. See “Item 2. Properties,” of Part I of this report.

Current wording

We are focused on building a strategic portfolio of intellectual property to support and protect our key innovations. 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.

Previous wording

ACM Shanghai’s shares began trading on the STAR Market under the stock code 688082. In the STAR IPO, ACM Shanghai issued 43,355,753 shares, representing ten percent of the total 433,557,100 shares outstanding after the STAR IPO. The shares were issued at a public offering price of RMB 85.00 per share, and the proceeds of the STAR IPO totaled approximately $545.5 million, net of fees and expenses. Upon completion of the STAR IPO, ACM owned approximately 82.5% of the outstanding ACM Shanghai shares. As of December 31, 2024, ACM's ownership declined to 81.5% due to the exercise of 2,150,309, and 3,033,344 stock options in May 2023 and December 2024, respectively, related to ACM Shanghai shares (note 17).

Current wording

The shares of ACM Shanghai, our principal operating subsidiary, began trading on the STAR Market under the stock code 688082 on November 18, 2021.

Previous wording

During the year ended December 31, 2024, ACM Research's principal operating subsidiary, ACM Shanghai (SSEC: 688082.SS), paid a cash dividend for an aggregate total of approximately RMB 273.2 million ($38.4 million) to the stockholders of ACM Shanghai, including ACM Research, which owned 82.0% of the outstanding shares of ACM Shanghai at the time. ACM Research intends to use the net proceeds for working capital and general corporate purposes.

Current wording

In September 2025, ACM Shanghai, paid a cash dividend of approximately RMB 264.9 million (approximately USD $36.8 million) to the stockholders of ACM Shanghai, including ACM Research. The cash portion of the dividend paid by ACM Shanghai to non-controlling interests was $7.6 million (note 2). During the years ended December 31, 2024 and 2023, ACM Shanghai paid cash dividends of approximately RMB 273.2 million ($38.4 million) and RMB 161.28 million ($22.2 million), respectively. ACM Research intends to use the dividend proceeds for working capital and general corporate purposes.

Previous wording

In early October 2022 the U.S. government enacted new rules aimed at restricting U.S. support for mainland China’s ability to manufacture advanced semiconductors. The rules included new export license requirements for exports, re-exports or transfers to or within mainland China of additional types of semiconductor manufacturing items, items for use in manufacturing designated types of semiconductor manufacturing equipment in mainland China, and semiconductor manufacturing equipment for use at certain IC manufacturing and development facilities in mainland China. 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. These restrictions were later updated to extend to Macau.

Current wording

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. 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. In most cases, license applications for these exports are reviewed under a presumption of denial. 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.

Previous wording

Effective on December 2, 2024, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) promulgated a final rule naming a number of companies to the BIS Entity List (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 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. 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.

Current wording

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. The new restrictions may also limit the ability of ACM Shanghai and ACM Korea personnel to provide services to U.S. customers, as these activities could involve the disclosure of U.S. technology to ACM Shanghai or ACM Korea personnel, which could require authorization from BIS. See “Item 1A. 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.

Previous wording

ACM Shanghai has determined that several of its customers have mainland China-based facilities that meet the restricted criteria set out in the October 2022 and October 2023 rules, and has also determined that several of its products, and/or components for its products, may meet the parameters of export control classification numbers, or ECCNs, affected by the restrictions. 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 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. Based on our ongoing review, we believe these regulations may directly impact ACM Shanghai’s ability to meet its future production plans, or indirectly impact the spending plans of ACM Shanghai’s customer base. 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.

Current wording

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 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. Based on our ongoing review, we believe these regulations may directly impact ACM Shanghai’s ability to meet its future production plans, or indirectly impact the spending plans of ACM Shanghai’s customer base. 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.

Previous wording

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.

Current wording

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.

Previous wording

On May 23, 2023, the Japanese government issued the final amendment to an ordinance implementing new export controls to require licensing for export of certain advanced semiconductor manufacturing equipment, effective as of July 23, 2023. 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. While the expanded export controls apply to exports to any jurisdiction, exports to certain jurisdictions, such as the United States, are expected to be permitted by certain types of broad general licenses. 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.

Current wording

On May 23, 2023, the Japanese government issued the final amendment to an ordinance implementing new export controls to require licensing for export of certain advanced semiconductor manufacturing equipment, effective as of July 23, 2023. 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. While the expanded export controls apply to exports to any jurisdiction, exports to certain jurisdictions, such as the United States, are expected to be permitted by certain types of broad general licenses. 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.

Previous wording

On June 30, 2023, the Government of the Netherlands published additional export control measures for advanced semiconductor manufacturing equipment. The Regulation on Advanced Semiconductor Manufacturing Equipment took effect on September 1, 2023. From that point on, the export of certain advanced semiconductor manufacturing equipment, as specified in the Annex to the Regulation, has been subject to a national export license authorization requirement by the Dutch Central Import and Export Service.

Current wording

Likewise, on September 30, 2023, the Government of the Netherlands published additional export control measures for advanced semiconductor manufacturing equipment. The Regulation on Advanced Semiconductor Manufacturing Equipment entered force on September 1, 2023. From that point on, the export of certain advanced semiconductor manufacturing equipment, as specified in the Annex to the Regulation, is now subject to a national export license authorization requirement by the Dutch Central Import and Export Service.

Previous wording

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:

Current wording

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:

Previous wording

•Sales and Development. During the sale process we may, depending on a prospective customer’s specifications and requirements, need to perform additional research, development and testing to establish that a tool can meet the prospective customer’s requirements. 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. As we expand our customer base, we expect to gain more repeat purchase orders for tools that we have already developed and tested, which we believe will reduce the need for a demonstration phase and shorten the development cycle.

Current wording

•Sales and Development. During the sale process we may, depending on a prospective customer’s specifications and requirements, need to perform additional research, development and testing to establish that a tool can meet the prospective customer’s requirements. 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. As we expand our customer base, we expect to gain more repeat purchase orders for tools that we have already developed and tested, which we believe will reduce the need for a demonstration phase and shorten the development cycle.

Previous wording

We expect our sales prices generally to range from $0.5 million to more than $5 million for our production tools. 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. 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.

Current wording

We expect our sales prices generally to range from $0.5 million to more than $5 million for our production tools. 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. 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.

Previous wording

We utilize ASC 606 which was adopted in 2018 set forth in Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers (Topic 606), of the Financial Accounting Standards Board, or FASB, regarding the recognition, presentation and disclosure of revenue in our financial statements as described below under “—Critical Accounting Estimates—Revenue Recognition.”

Current wording

We recognize and disclose revenue in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers (Topic 606), of the Financial Accounting Standards Board, or FASB. Refer to “—Critical Accounting Estimates—Revenue Recognition" for more detail.

Previous wording

The loss or delay of multiple large sale transactions in a quarter could impact our results of operations for that quarter and any future quarters for which revenue from that transaction is lost or delayed, as described under “Item 1A. 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. Our tool demand forecasts are based on multiple assumptions, including non-binding forecasts received from customers years in advance, each of which may introduce error into our estimates. Difficulties in forecasting demand for our tools make it difficult for us to project future operating results and may lead to periodic inventory shortages or excess spending on inventory or on tools that may not be purchased, as further described in “Item 1A. 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.”

Current wording

The loss or delay of multiple large sale transactions in a quarter could impact our results of operations for that quarter and any future quarters for which revenue from that transaction is lost or delayed, as described under “Item 1A. 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. Our tool demand forecasts are based on multiple assumptions, including non-binding forecasts received from customers years in advance, each of which may introduce error into our estimates. Future operating results are also difficult to project due to the long lead time for initial tools that we produce for a customer that potentially may not be accepted. Refer to “Item 1A. 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.”

Previous wording

We are not party to any long-term purchasing agreements with suppliers. Please see “Item 1A. Risk Factors—Risks Related to Our Business and Our Industry—Our customers do not generally enter into long-term purchase commitments, and they may decrease, cancel or delay their projected purchases at any time.”

Current wording

We are not generally party to long-term purchasing agreements with suppliers. Please see “Item 1A. Risk Factors—Risks Related to Our Business and Our Industry—Our customers do not generally enter into long-term purchase commitments, and they may decrease, cancel or delay their projected purchases at any time.”

Previous wording

As our customer base and tool installations continue to grow, we may need to hire additional manufacturing personnel. 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.

Current wording

As our customer base and tool installations continue to grow, we may need to hire additional manufacturing personnel. 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.

Previous wording

•compensation of personnel associated with pre- and after-sales support and other sales and marketing activities, including stock-based compensation;

Current wording

•compensation of personnel associated with pre-sale and after-sale services and support and other sales and marketing activities, including stock-based compensation;

Previous wording

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.

Current wording

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.

Previous wording

•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. 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. 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.

Current wording

•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. 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. 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.

Previous wording

•We also grant discounts to employees when they subscribe for the new shares of ACM Shanghai.

Current wording

•We also grant discounts to employees when they subscribe for new shares of ACM Shanghai.

Previous wording

•Government subsidies related to depreciable assets are credited to income over the useful lives of the related assets for which the grant was received. Government subsidies related to VAT reduction are credited to income in the period received. For 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.

Current wording

•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. Government subsidies related to VAT reduction are credited to other income in the period received. For 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.

Previous wording

Unearned government subsidies received are deferred for recognition and recorded as other long-term liabilities (see note 12 in the Notes to Consolidated Financial Statements included herein under “Item 8. Financial Statements and Supplementary Data.”) in the consolidated balance sheet until the criteria for such recognition are satisfied.

Current wording

Unearned government subsidies received are deferred for recognition and recorded as other long-term liabilities on our consolidated balance sheet until the criteria for such recognition have been satisfied. All of the company’s other long-term liabilities represent unearned government subsidies.

Previous wording

17). As a result, we reflect the portion of our net income allocable to the minority holders of ACM Shanghai shares as net income attributable to non-controlling interests.

Current wording

Net income attributable to non-controlling interests is attributable to the minority holders of shares of ACM Shanghai stock. As a result, we reflect the portion of our net income allocable to the minority holders of ACM Shanghai shares as net income attributable to non-controlling interests. As of December 31, 2025, ACM Research held 74.6% of ACM Shanghai’s outstanding shares.

Previous wording

Cost of revenue and gross profit increased in 2023 as compared to 2022 due to the increased sales volume and an increase in gross margin. The increased gross margin versus the prior-year period was primarily due to a higher mix of ECP (front-end and packaging), furnace, and other technologies, and a positive impact due to a change in the RMB to U.S. dollar currency exchange rate.

Current wording

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. The decrease in gross margin versus the prior-year period was primarily due to revenue mix between product categories, and a higher provision for inventory.

Previous wording

Sales and marketing expense increased in 2024 as compared to 2023, and reflected an increase of $8.4 million due to higher personnel costs, an increase of $4.9 million due to higher stock-based compensation, and increase of $4.4 million from travel & entertainment and commissions, and an increase of $0.7 million in professional & outside services and other expenses.

Current wording

Sales and marketing expense increased $18.4 million in 2024 as compared to 2023, reflecting increases of $8.4 million in personnel costs, $4.9 million in stock-based compensation, $4.4 million from travel and entertainment and commissions, and $0.7 million in professional & outside services and other expenses.

Previous wording

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 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.

Current wording

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. 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.

Previous wording

Research and development expense represented 13.5% and 16.6% of our revenue in the years ended December 31, 2024 and 2023, respectively. 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.

Current wording

Research and development expense represented 16.1% and 13.5% of our revenue in the years ended December 31, 2025 and 2024, respectively. 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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

Interest income, net, increased slightly in 2024 compared to 2023, principally as a result of 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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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. The increased tax expense in 2024 primarily resulted from the tax effect of increased operating profit generated.

Current wording

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. The decreased tax expense in 2025 primarily resulted from the tax effect of decreased operating profit generated.

Previous wording

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 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. Pursuant to the Corporate Income Tax Law of mainland China, our mainland China subsidiaries generally would be liable for mainland China corporate income taxes at a rate of 25%. According to Guoshuihan 2009 No. 203, an entity certified as an “advanced and new technology enterprise” is entitled to a preferential income tax rate of 15%. 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. In 2021, ACM Shanghai was certified as an eligible integrated circuit production enterprise and was entitled to a preferential income tax rate of 12.5% from January 1, 2020 to December 31, 2022. 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.

Current wording

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. 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. Pursuant to the Corporate Income Tax Law of mainland China, our mainland China subsidiaries generally would be liable for mainland China corporate income taxes at a rate of 25%. According to Guoshuihan 2009 No. 203, an entity certified as an “advanced and new technology enterprise” is entitled to a preferential income tax rate of 15%. 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%. 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 Lingang’s tax is expected to be exempt for first two profitable years after NOL utilization and half of thestatuatory tax rate for the next three years.

Previous wording

Net Income Attributable to Non-Controlling Interests and Redeemable Non-Controlling Interests

Current wording

Net Income Attributable to Non-Controlling Interests

Previous wording

ACM Research owns 81.5% of ACM Shanghai’s (note 1) outstanding shares which is reflected in our consolidated financial statements (note 2). We reflect the portion of net income allocable to the minority holders of ACM Shanghai shares as net income attributable to non-controlling interests.

Current wording

ACM Research owns 74.6% of ACM Shanghai’s (note 1) outstanding shares which is reflected in our consolidated financial statements (note 2). We reflect the portion of net income allocable to the minority holders of ACM Shanghai shares as net income attributable to non-controlling interests.

Previous wording

We recorded a foreign currency translation adjustment of ($15.7 million) for the year ended December 31, 2024, as compared to $(10.6) million for 2023, based on the net effect of RMB to dollar exchange rate fluctuations for the period on the converted value of ACM Shanghai’s RMB-denominated balances to U.S. dollar equivalents.

Current wording

The foreign currency translation adjustment is primarily based on the net effect of RMB to dollar exchange rate fluctuations for the period on the converted value of ACM Shanghai’s RMB-denominated balances to U.S. dollar equivalents.

Previous wording

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. Cash and cash equivalents, restricted cash, short-term time deposits and long-term time deposits were $441.9 million at December 31, 2024, compared to $304.5 million at December 31, 2023. The $137.4 million increase was primarily driven by $152.5 million of cash generated by operations, ($103.8 million) used in investing activities excluding the change in time deposits,$92.5 million net cash provided by financing activities, a ($4.8) million decrease from the effect of exchange rate on cash, cash equivalents and restricted cash, and a $1.0 million increase from the effect of exchange rate on non-cash items.

Current wording

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. 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. The $690.7 million increase was primarily driven by $742.5 million net cash provided by financing activities, $12.8 million from the effects of exchange rates on cash, cash equivalents and restricted cash, and $1.0 million from the effects of foreign exchange translation rates on time deposits, partially offset by $10.3 million used in operations and $55.3 million used in investing activities excluding the change in time deposits.

Previous wording

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. We currently intend for ACM Shanghai to retain all available funds from any future earnings for use in the operation of its business and do not anticipate it paying any cash dividends. Our accounts receivable balance fluctuates from period to period, which affects our cash flow from operating activities. Fluctuations vary depending on cash collections, client mix, and the timing of shipment and acceptance of our tools.

Current wording

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. The use of proceeds raisedby Private Offering and the STAR Market IPO and Private Offering without further approvals, are limited to specific usage. We currently intend for ACM Shanghai to retain all available funds from any future earnings for use in the operation of its business and do not anticipate it paying any cash dividends. Our accounts receivable balance fluctuates from period to period, which affects our cash flow from operating activities. Fluctuations vary depending on cash collections, client mix, and the timing of shipment and acceptance of our tools.

Previous wording

We have never declared or paid cash dividends on our capital stock. 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.

Current wording

ACM Research has never declared or paid cash dividends on our capital stock. 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.

Previous wording

Cash Flow Provided by (Used in) Operating Activities. Net cash provided by (used in) operations during the year ended December 31, 2024, 2023, and 2022 consisted of:

Current wording

Cash Flow from Operating Activities. Net cash (used in) provided by operating activities during the year ended December 31, 2025, 2024, and 2023 consisted of: