Key Moments
- Applied Materials Inc (NASDAQ:AMAT) received a $252.5 million penalty from the U.S. Department of Commerce over alleged export control violations.
- The Commerce Department’s Bureau of Industry and Security cited 56 alleged breaches tied to exports of advanced chipmaking tools to China.
- Regulators said the company exported or attempted to export at least $126 million in equipment to Semiconductor Manufacturing International Corp (HK:0981) from 2020 to 2023.
U.S. Commerce Department Imposes $252.5 Million Fine
Applied Materials Inc (NASDAQ:AMAT) has been ordered to pay a $252.5 million fine by the U.S. Department of Commerce in connection with what regulators described as unlawful shipments of sophisticated semiconductor manufacturing equipment to China.
The enforcement action was announced on Wednesday by the Commerce Department’s Bureau of Industry and Security (BIS), which oversees compliance with U.S. export control rules.
Details of the Alleged Export Control Violations
The BIS alleged that Applied Materials committed 56 violations of U.S. export regulations governing the transfer of sensitive technology to China. The accusations center on exports and attempted exports of advanced chip production tools that fall under strict U.S. oversight.
According to the Commerce Department, the equipment in question was valued at a minimum of $126 million and was shipped or intended to be shipped to Semiconductor Manufacturing International Corp (HK:0981), described as China’s largest semiconductor manufacturer. The alleged violations took place between 2020 and 2023.
| Entity | Regulator/Counterparty | Alleged Violations | Value of Equipment | Period | Penalty |
|---|---|---|---|---|---|
| Applied Materials Inc (NASDAQ:AMAT) | U.S. Department of Commerce – BIS | 56 violations of U.S. technology export guidelines to China | At least $126 million | 2020 to 2023 | $252.5 million |
Company Response and Policy Backdrop
In a separate statement, Applied Materials said it was satisfied that the dispute had been resolved, without providing further operational or financial guidance linked to the settlement.
The firm had previously cautioned that tightening U.S. export controls on technology sales to China could weigh on its revenue. These concerns emerged after both the Biden and Trump administrations implemented stringent limits on semiconductor-related exports to China, measures that were partially framed as efforts to slow the development of artificial intelligence capabilities in Beijing.
Context Within Recent BIS Enforcement Actions
The $252.5 million penalty ranks as the second-largest financial sanction ever imposed by the BIS for export violations. It follows a $300 million fine issued in 2023 against Seagate Technology PLC (NASDAQ:STX) for supplying hard disk drives to China’s Huawei.
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