June 22, 2024

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Applied Materials Declines After Report of US Criminal Probe

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(Bloomberg) — Applied Materials Inc., the largest US maker of chipmaking machinery, slid in late trading following a report that it faces a US criminal investigation for allegedly violating export restrictions to China.

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The company is being probed by the Justice Department over dealings with China’s biggest chipmaker, Semiconductor Manufacturing International Corp., according to Reuters. The department is looking at whether Applied Materials sold hundreds of millions of dollars of equipment without the proper licenses, the news outlet reported, citing unidentified people familiar with the situation.

The Justice Department declined to comment. Applied Materials declined to discuss details of the case but noted that it previously disclosed a federal review of China deliveries.

“Applied Materials first disclosed in October 2022 that it received a subpoena from the US Attorney’s Office for the District of Massachusetts requesting information relating to certain China customer shipments,” the company said in an emailed statement. “The company is cooperating with the government and remains committed to compliance with global laws, including export controls and trade regulations.”

The report overshadowed generally upbeat quarterly results from Applied Materials, which topped analysts’ estimates with its earnings and forecast.

Shares of Applied Materials, based in Santa Clara, California, fell as much as 7% in extended trading. KLA Corp. and Lam Research Corp., two other US chip-equipment makers, also fell. KLA was down 3.4%, while Lam dropped 1.6%.

The company and its peers are operating under increasingly strict rules imposed by Washington on exports of chip technology to China. The US has argued such rules are needed to protect national security and requires companies to seek licenses to send certain types of machines or have dealings with particular companies in the Asian nation.

According to Reuters, Applied Materials…

2023-11-16 17:24:54

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