USA expands investigations into chip and transmission manufacturer Applied Materials

(Bloomberg) — The U.S. Commerce Department is continuing its investigation into Applied Materials Inc.’s shipments to Chinese customers, part of a broader effort to ensure that increasingly stringent trade restrictions against the Asian country are effective.

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The company said in a filing this week that it received subpoenas from the U.S. Department of Commerce’s Bureau of Industry and Security in May. The agency had already issued subpoenas in November last year.

“We are cooperating fully with the government in these matters,” Applied Materials said in the complaint. “These matters are subject to uncertainty and we cannot predict the outcome, nor can we reasonably estimate the amount of losses or penalties, if any, with respect to these matters.”

The US government has imposed restrictions on the type of chip-making equipment that can be supplied to Chinese customers, seeking to prevent the country from acquiring cutting-edge technologies that Washington considers a threat to national security.

Applied Materials, based in Santa Clara, California, has also received inquiries from the U.S. Attorney’s Office for the District of Massachusetts dating back to 2022, as well as another inquiry from the Securities and Exchange Commission earlier this year.

Read more: US resumes investigation into Applied Materials’ China business

The company is the largest U.S. maker of chip production equipment. Like its competitors, it lost sales when U.S. export rules were first announced. Still, China remains an important market, accounting for about a quarter of Applied Materials’ sales.

Chinese companies, lacking access to modern production machinery, have invested heavily in older equipment – equipment used to make chips that are simpler but still essential to electronics. Such components are used in electric vehicles, factory equipment and other areas.

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