DOJ Probing Applied Materials' Exports to China, Company Says
DOJ is investigating U.S. chip company Applied Materials for potentially violating export controls against China, company executives said last week. Chief Financial Officer Bryce Hill said the company received a subpoena last year and is “fully cooperating” with the government.
“Of course, we remain committed to complying to all of the trade rules,” Hill said during a Nov. 16 earnings call. He declined to provide more information “because this is an ongoing legal matter” but said Applied Materials had disclosed the inquiry in an October 2022 SEC filing. In that filing, the company said it received a subpoena from the U.S. Attorney’s Office for the District of Massachusetts “requesting information relating to certain China customer shipments.”
Reuters was first to report the government probe of Applied Materials. The company is reportedly being investigated for sending chip equipment to China’s Semiconductor Manufacturing International Corp. -- which was placed on the Entity List in 2020 -- via South Korea without the required export licenses. The report said “hundreds of millions of dollars of equipment is involved.” A DOJ spokesperson declined to comment.
During the earnings call, Applied Materials CEO Gary Dickerson also briefly touched on recently updated U.S. chip-related restrictions for exports to China, saying the company isn’t expecting to be heavily affected. “We do not expect an incremental material impact from the recently updated trade rules,” he said. “We believe equipment demand in China is likely to remain healthy for an extended period, because China's domestic manufacturing capacity remains significantly below its share of worldwide semiconductor demand."