Applied Materials Under US Criminal Investigation For Evading Export Restrictions

Exclusive Applied Materials under US criminal probe for shipments to China's SMIC-sources

Applied Materials, the largest maker of semiconductor equipment in the country, is under a US criminal probe. The accusation against the company is that it has evaded export restrictions on SMIC. The latter is the top chipmaker in China.

The Justice Department is investigating the matter. As per sources, they have accused Applied Material of sending equipment to SMIC through South Korea without export licenses. The matter involves hundreds of millions of dollars of equipment. After the news, shares of Applied Materials fell 7.3% as the company reported its quarterly results.

According to,

The U.S. has restricted shipments of advanced chips and chipmaking equipment to China for national security, and the Justice and Commerce departments launched a task force earlier this year to investigate and prosecute criminal violations of export controls. The rules are aimed at stemming the flow of U.S. technology that could be used to bolster China’s military and intelligence capabilities.

Applied Materials is based in Santa Clara, California. The company stated that it disclosed the information in October 2022. The disclosure said that the company received a subpoena for information on certain customer shipments from China from the US Attorney’s office in Massachusetts.

The company also said that it is cooperating with the government at the moment. It also said that the company is fully committed to compliance with global laws, including trade regulations and export controls.

According to sources, the responsibility of the investigation lies with the prosecutors in the National Security Unit of the US Attorney’s office. However, as per sources, it is still not sure whether Applied Materials actually violated the law or not. It is also not clear whether the investigation results in charges or not.

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