US chip gear maker Applied Materials under criminal probe for shipments to China’s SMIC: sources
- The largest US chip equipment maker is being probed by the Justice Department for sending equipment to SMIC via South Korea without export licenses, the sources said
- The shipments began after the US Commerce Department added SMIC to its Entity List in December 2020, which restricted exports of technology to the company
Semiconductor equipment maker Applied Materials is under US criminal investigation for potentially evading export restrictions on China’s top chip foundry Semiconductor Manufacturing International Corp (SMIC), according to three people familiar with the matter.
The largest US chip equipment maker is being investigated by the Justice Department for sending equipment to SMIC via South Korea without export licences, the sources said. Hundreds of millions of dollars of equipment is involved, one of the people said.
Shares in Applied Materials fell 7.3 per cent after the news and the company reported quarterly results.
The US has restricted shipments of advanced semiconductors and chip-making equipment to China for national security reasons, 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 US technology that could be used to bolster China’s military and intelligence capabilities.
Santa Clara, California-based Applied Materials said on Thursday it first disclosed in October 2022 that it had received a subpoena from the US Attorney’s Office in Massachusetts for information on certain China customer shipments.
“The company is cooperating with the government and remains committed to compliance and global laws, including export controls and trade regulations,” it said in a statement.
The US Attorney’s office in Boston said: “We do not confirm or deny investigations.”
Prosecutors in the office’s National Security Unit are handling the ongoing investigation, two sources said.