Tech News Summary:
- Applied Materials is under criminal investigation in the United States for potentially evading restrictions on exports to China’s SMIC, causing its shares to fall by 7.3%.
- The company is being investigated for shipping equipment to SMIC through South Korea without export licenses, despite US restrictions on shipments of advanced chips and chip-making equipment to China for national security reasons.
- The investigation highlights the challenges faced by companies operating within highly regulated industries and sheds light on geopolitical tensions between major players in the global tech supply chain.
According to exclusive sources, Applied Materials, a major supplier for semiconductor manufacturing equipment, is facing a criminal probe in the United States over its shipments to China’s Semiconductor Manufacturing International Corporation (SMIC).
The probe, which is being conducted by the U.S. Department of Justice, is reportedly looking into whether Applied Materials violated U.S. export control laws by shipping equipment to SMIC without the required licenses.
SMIC has been on the U.S. government’s Entity List since December 2020, which restricts American companies from exporting certain goods to the Chinese firm without a license. The U.S. government cited national security concerns and alleged ties to the Chinese military as reasons for placing SMIC on the Entity List.
Applied Materials is one of the world’s leading suppliers of equipment used in the production of semiconductors, and any potential legal action against the company could have significant repercussions for the global semiconductor industry.
Both Applied Materials and SMIC have declined to comment on the matter, and the U.S. Department of Justice has not officially confirmed the existence of the probe.
The ongoing investigation comes in the midst of heightened tensions between the U.S. and China, particularly in the tech sector. The U.S. government has been increasingly scrutinizing Chinese tech companies and their ties to the Chinese military, and this probe could further exacerbate the strained relationship between the two countries.
This development also highlights the importance of export control compliance for companies operating in the high-tech sector, as violations can result in severe legal and financial consequences.
As the situation unfolds, industry observers will be closely monitoring the potential impact of the probe on Applied Materials, SMIC, and the broader semiconductor industry.