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US extends investigation into chip-gear maker Applied Materials

Bloomberg
Bloomberg • 2 min read
US extends investigation into chip-gear maker Applied Materials
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The US Department of Commerce is continuing an investigation into Applied Materials’s shipments to Chinese customers, part of a broader effort to ensure that increasingly strict trade restrictions against the Asian nation are effective. 

The company said in a filing this week that it had received subpoenas in May from the Commerce Department’s Bureau of Industry and Security. That followed earlier subpoenas from the agency in November of last year.

“We are cooperating fully with the government in these matters,” Applied Materials said in the filing. “These matters are subject to uncertainties, and we cannot predict the outcome, nor reasonably estimate a range of loss or penalties, if any, relating to these matters.”

The US government has placed restrictions on the types of chipmaking equipment that can be shipped to Chinese customers, aiming to prevent the country from acquiring cutting-edge capabilities that Washington has said would be a threat to national security.

Applied Materials, based in Santa Clara, California, also has received requests from the US Attorney’s Office for the District of Massachusetts dating back to 2022 and another inquiry from the Securities and Exchange Commission earlier this year.

The company is the biggest US maker of chip-manufacturing gear. Like its peers, it lost sales when the US export rules were initially announced. Nonetheless, China remains an important market, accounting for about a quarter of Applied Materials’ revenue.

See also: Nvidia tops US$3 trillion in market value, leapfrogging Apple

Chinese businesses, cut off from advanced production machinery, have spent heavily on older types of gear — equipment that’s used to make chips that are simpler but still vital to electronics. Such components are used in electric vehicles, factory equipment and other areas.

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