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Applied Materials receives new subpoenas on China shipments

Daniel Nenni

Staff member
Illustration shows Applied Materials logo

A smartphone with a displayed Applied Materials logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File

Feb 27 (Reuters) - A federal investigation into semiconductor equipment supplier Applied Materials (AMAT.O), opens new tab involving China shipments has widened to other U.S. agencies, including the Securities and Exchange Commission, according to a company filing on Tuesday.

The filing said the company had received an SEC subpoena and another subpoena related to China shipments from the U.S. Attorney’s Office for the District of Massachusetts in February. In November 2023 the Commerce Department also sent a subpoena "relating to certain China customer shipments"

The company is under U.S. criminal investigation for potentially evading export restrictions on China's top chipmaker SMIC, according to three people familiar with the matter, Reuters reported in November.

"I would call this the one, two, three punch," said Deborah Curtis, a former U.S. official at the Commerce and Justice Departments, referring to the various agencies probing Applied Materials.

The company also said on Tuesday that it had received a subpoena in February from the U.S. Attorney’s Office for the District of Massachusetts, requesting information related to certain federal award applications this month.

Shares of the company were down 2.5% in trading on Wednesday.

A spokesperson for the U.S. Attorney in Boston declined comment. The Commerce Department did not immediately respond to a request for comment.
Applied Materials, the largest U.S. semiconductor equipment maker, is being probed by the Justice Department for sending equipment to SMIC via South Korea without export licenses, sources told Reuters in November. Hundreds of millions of dollars of equipment is involved, one of the people said at the time.

The company produced semiconductor equipment in Massachusetts, then repeatedly shipped the equipment from its plant in Gloucester to a subsidiary in South Korea, the people said. From there, the equipment went to China's Semiconductor Manufacturing International Corporation (SMIC), the people familiar with the probe said in November.

Interesting it sounds like they are in a knot over some Varian ion implanters since I don’t think there were any other equipment vendors in MA besides them.