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Applied Materials in Hot Water For Gear Sent to China Chipmaker

America’s biggest chip equipment maker said on Thursday it received another subpoena from the Commerce Department for the probe on whether it contravened US chip curbs

Applied Materials, which is based in California, has been accused of repeatedly shipping equipment from its plant in Gloucester, Massachusetts, to a subsidiary in South Korea and then to SMIC (Reuters image).


US authorities are conducting a criminal probe into the country’s biggest chip equipment maker on whether it secretly sent large cargoes to China’s top chipmaker via South Korea.

Applied Materials revealed on Thursday that it received another subpoena from the US Department of Commerce this month, as regulators requested more information on shipments that may have contravened chip curbs imposed by the Biden administration.

The semiconductor equipment maker received an SEC subpoena and two from the US Attorney’s Office for the District of Massachusetts. They follow a subpoena sent by the Commerce Department in November 2023 “requesting information relating to certain China customer shipments.”


ALSO SEE: Nvidia Chip Prices Take a Hit in Duel With China’s Huawei


Applied Materials is being investigated for potentially evading export restrictions on Semiconductor Manufacturing International Corporation (SMIC), three people familiar with the matter said in a report in November.

Applied Materials, which supplies chipmaking tools to Samsung Electronics and Taiwan Semiconductor Manufacturing Co, reported that 43% of its total revenue came from China in the second quarter.

Applied Materials is being probed 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 probe said in November.


SMIC growing despite US sanctions

SMIC – mainland China’s biggest contract chipmaker – has become the world’s third-largest maker of integrated circuits on the back of strong domestic demand, despite sanctions imposed by the US, the South China Morning Post said on Thursday.

Tech research firm Counterpoint said the Shanghai-based company, which was put on a US trade blacklist in 2020, had 6% of global chip foundry revenue in the first quarter of this year, behind Taiwanese giant TSMC (with 62%) and Samsung Electronics (with 13%) in the same period.

SMIC is expected to enjoy double-digit growth in the current quarter amid a recovery in domestic demand for image sensors, power-management chips and display driver ICs, the SCMP report said, citing Counterpoint.

The company is believed to have made the advanced Kirin 9000s processor used in Huawei’s best-selling Mate 60 Pro 5G handset, released in the third quarter last year.


  • Reuters with additional editing by Jim Pollard



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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.


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