Applied Materials to pay $252.5 million to settle US probe

By Nick Turner, Bloomberg

Applied Materials Inc. will pay $252.5 million to settle a US Commerce Department investigation into improper exports to China, ending a yearslong saga for the largest American supplier of chipmaking machinery.

The agreement resolves allegations by the Commerce Department’s Bureau of Industry and Security that certain shipments to China between November 2020 and July 2022 didn’t comply with export regulations, the company said in a statement Wednesday.

The US Justice Department and Securities and Exchange Commission also closed related probes into the matter without taking action, Applied Materials said.

The US investigations had cast a cloud over the Santa Clara, California-based company and weighed on its stock price. They came at a time of mounting restrictions on the export of semiconductors and manufacturing technology to China, the largest market for chips.

Applied Materials first disclosed in October 2022 that it received a subpoena requesting information relating to certain shipments to customers in China. A 2023 report that it would face a criminal investigation over the issue then sent its shares tumbling.

In Wednesday’s statement, Applied Materials said it reached a civil settlement with the Commerce Department.

“Applied believes that resolving this matter is in the best interest of the company, its customers, employees and shareholders,” the company said. “Integrity and compliance are core to how Applied operates, and the company remains fully committed to maintaining strong export-control and trade-compliance practices across its global operations.”

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