diff --git a/frontends/ast/genrtlil.cc b/frontends/ast/genrtlil.cc
index 86ea70b51..d9eb51a9c 100644
--- a/frontends/ast/genrtlil.cc
+++ b/frontends/ast/genrtlil.cc
@@ -2085,8 +2085,6 @@ RTLIL::SigSpec AstNode::genRTLIL(int width_hint, bool sign_hint)
 			check_unique_id(current_module, id, this, "cell");
 			RTLIL::Cell *cell = current_module->addCell(id, "");
 			set_src_attr(cell, this);
-			// Set attribute 'module_not_derived' which will be cleared again after the hierarchy pass
-			cell->set_bool_attribute(ID::module_not_derived);
 
 			for (auto it = children.begin(); it != children.end(); it++) {
 				auto* child = it->get();
@@ -2149,6 +2147,11 @@ RTLIL::SigSpec AstNode::genRTLIL(int width_hint, bool sign_hint)
 				}
 				log_abort();
 			}
+
+			// Set attribute 'module_not_derived' which will be cleared again after the hierarchy pass
+			if (cell->type.isPublic())
+				cell->set_bool_attribute(ID::module_not_derived);
+
 			for (auto &attr : attributes) {
 				if (attr.second->type != AST_CONSTANT)
 					input_error("Attribute `%s' with non-constant value.\n", attr.first);
diff --git a/passes/techmap/techmap.cc b/passes/techmap/techmap.cc
index b49a40704..cf7ce56e2 100644
--- a/passes/techmap/techmap.cc
+++ b/passes/techmap/techmap.cc
@@ -333,9 +333,6 @@ struct TechmapWorker
 
 			RTLIL::Cell *c = module->addCell(c_name, tpl_cell);
 			design->select(module, c);
-
-			if (c->type.begins_with("\\$"))
-				c->type = c->type.substr(1);
 			
 			if (c->type == ID::_TECHMAP_PLACEHOLDER_ && tpl_cell->has_attribute(ID::techmap_chtype)) {
 				c->type = RTLIL::escape_id(tpl_cell->get_string_attribute(ID::techmap_chtype));
@@ -436,13 +433,9 @@ struct TechmapWorker
 			if (handled_cells.count(cell) > 0)
 				continue;
 
-			std::string cell_type = cell->type.str();
-			if (in_recursion && cell->type.begins_with("\\$"))
-				cell_type = cell_type.substr(1);
-
-			if (celltypeMap.count(cell_type) == 0) {
-				if (assert_mode && cell_type.back() != '_')
-					log_error("(ASSERT MODE) No matching template cell for type %s found.\n", log_id(cell_type));
+			if (celltypeMap.count(cell->type) == 0) {
+				if (assert_mode && !cell->type.ends_with("_"))
+					log_error("(ASSERT MODE) No matching template cell for type %s found.\n", log_id(cell->type));
 				continue;
 			}
 
@@ -454,7 +447,7 @@ struct TechmapWorker
 				if (GetSize(sig) == 0)
 					continue;
 
-				for (auto &tpl_name : celltypeMap.at(cell_type)) {
+				for (auto &tpl_name : celltypeMap.at(cell->type)) {
 					RTLIL::Module *tpl = map->module(tpl_name);
 					RTLIL::Wire *port = tpl->wire(conn.first);
 					if (port && port->port_input)
@@ -481,12 +474,7 @@ struct TechmapWorker
 			log_assert(cell == module->cell(cell->name));
 			bool mapped_cell = false;
 
-			std::string cell_type = cell->type.str();
-
-			if (in_recursion && cell->type.begins_with("\\$"))
-				cell_type = cell_type.substr(1);
-
-			for (auto &tpl_name : celltypeMap.at(cell_type))
+			for (auto &tpl_name : celltypeMap.at(cell->type))
 			{
 				IdString derived_name = tpl_name;
 				RTLIL::Module *tpl = map->module(tpl_name);
@@ -508,8 +496,6 @@ struct TechmapWorker
 
 				if (!extmapper_name.empty())
 				{
-					cell->type = cell_type;
-
 					if ((extern_mode && !in_recursion) || extmapper_name == "wrap")
 					{
 						std::string m_name = stringf("$extern:%s:%s", extmapper_name, log_id(cell->type));
@@ -935,11 +921,6 @@ struct TechmapWorker
 						RTLIL::Module *m = design->addModule(m_name);
 						tpl->cloneInto(m);
 
-						for (auto cell : m->cells()) {
-							if (cell->type.begins_with("\\$"))
-								cell->type = cell->type.substr(1);
-						}
-
 						module_queue.insert(m);
 					}
 
@@ -1168,7 +1149,7 @@ struct TechmapPass : public Pass {
 
 		std::vector<std::string> map_files;
 		std::vector<RTLIL::IdString> dont_map;
-		std::string verilog_frontend = "verilog -nooverwrite -noblackbox";
+		std::string verilog_frontend = "verilog -nooverwrite -noblackbox -icells";
 		int max_iter = -1;
 
 		size_t argidx;
diff --git a/tests/techmap/module_not_derived.ys b/tests/techmap/module_not_derived.ys
new file mode 100644
index 000000000..299e4b75b
--- /dev/null
+++ b/tests/techmap/module_not_derived.ys
@@ -0,0 +1,31 @@
+# Test 1: internal cells from alumacc/techmap must not keep module_not_derived.
+read_verilog <<EOF_VERILOG
+module top(a, b, y);
+  input wire [7:0] a;
+  input wire [7:0] b;
+  output wire [7:0] y;
+  assign y = a + b;
+endmodule
+EOF_VERILOG
+
+prep
+alumacc
+techmap -max_iter 1
+
+select -assert-any t:$lcu
+select -assert-count 0 t:$lcu a:module_not_derived %i
+
+design -reset
+# Test 2: public module instances should still keep module_not_derived.
+read_verilog <<EOF_VERILOG
+module mycell(input a, output y);
+	assign y = a;
+endmodule
+
+module top(input a, output y);
+	mycell u0(.a(a), .y(y));
+endmodule
+EOF_VERILOG
+
+hierarchy -top top
+select -assert-any t:mycell a:module_not_derived %i