US extends probe into chip-gear maker Applied Materials, possibly over shipments to China’s SMIC

The largest US semiconductor equipment maker says its has received another subpoena from the commerce department
Applied Materials is being probed by the Justice Department for sending equipment to SMIC via South Korea without export licences, sources said

Semiconductors

Reuters

Published: 11:12am, 25 May 2024

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Applied Materials disclosed on Thursday that it received another subpoena from the US Department of Commerce in May, as regulators request more information on shipments to China.

The largest US semiconductor equipment maker received a US Securities and Exchange Commission subpoena and two from the US Attorney’s Office for the District of Massachusetts in February. In November 2023 the Commerce Department sent a subpoena “requesting information relating to certain China customer shipments”.

Applied Materials is under US criminal investigation for potentially evading export restrictions on China’s top chip maker, Semiconductor Manufacturing International Corporation (SMIC), three people familiar with the matter said in a Reuters report in November.

The SMIC headquarters in Shanghai, China. Photo: Bloomberg

Applied Materials, which supplies chip-making tools to Samsung Electronics and Taiwan Semiconductor Manufacturing Company (TSMC), reported that 43 per cent of its total revenue came from China in the second quarter.

Applied Materials is being investigated by the Justice Department for sending equipment to SMIC via South Korea without export licences, sources told Reuters in November. Hundreds of millions of dollars of equipment is involved, one of the people said at the time.

The company repeatedly shipped equipment from its plant in Gloucester, Massachusetts, to a subsidiary in South Korea and then to SMIC, the people familiar with the investigation said in November.