Needham downgrades ACM Research after U.S. bans subsidiaries

eedham downgraded ACM Research (ACMR) to Hold from Buy without a price target following the addition of ACM Shanghai and ACM Korea to the U.S. Entity List. While the stock has pulled back, uncertainty around ACM’s ability to source components to sustain the business, as well as the business relationship between the company, a U.S. entity, and its banned subsidiaries in China and Korea, will remain an overhang for the stock, the analyst tells investors in a research note. On December 2, the U.S. added several ACM subsidiaries to the Entity List, Needham points out. It believes ACM still relies on the outside world, including the U.S., to source certain components. The company will struggle to maintain the relationship with its U.S. suppliers, Needham contends.