U.S. continues to investigate Applied Materials for doing business with Chinese entities — company receives another subpoena, one of many over the past couple of years

According to Bloomberg, Applied Materials said that it had received one more subpoena from the U.S. Commerce Department’s Bureau of Industry and Security regarding its dealings with Chinese customers. This is by far not the first subpoena the company has received in the last couple of years, so the U.S. government seems to want more details from Applied.

“We have received multiple subpoenas from government authorities requesting information relating to certain China customer shipments,” a statement in Applied Materials’s filing with the SEC reads. “In August 2022 and February 2024, we received subpoenas from the U.S. Attorney’s Office for the District of Massachusetts; in November 2023 and May 2024, we received subpoenas from the U.S. Commerce Department’s Bureau of Industry and Security; and in February 2024, we received a subpoena from the U.S. Securities and Exchange Commission.”

It is not the first time Applied Materials has received a subpoena. Yet, the company cooperates with the government, which might result in a positive resolution for Applied Materials, at least according to the company.

“Also in February 2024, we received a subpoena from the U.S. Attorney’s Office for the District of Massachusetts requesting information related to certain federal award applications, the statement says. “We are cooperating fully with the government in these matters. These matters are subject to uncertainties, and we cannot predict the outcome.”

It is not the first time the U.S. government has investigated Applied Materials. One of the U.S. Justice Department’s investigations is centered on claims that Applied Materials bypassed necessary export licenses by sending equipment worth hundreds of millions of dollars to SMIC via South Korea. This shipment occurred due to national security concerns. Due to national security fabrication equipment, the U.S. Commerce Department added SMIC to its Entity List in December 2020, and the precise timing of these shipments remains undisclosed.

In October 2022, Applied Materials acknowledged receiving a subpoena from the Massachusetts U.S. Attorney’s Office, which sought information about its shipments to specific Chinese customers. Since then, the company has received multiple subpoenas as various government agencies investigate its business dealings with Chinese entities.

In October 2023, the U.S. government introduced strict export controls on high-performance processors and advanced semiconductor manufacturing equipment to China, citing national security. U.S. fab tool manufacturers now need a license to export equipment capable of producing FinFET logic chips with 14nm/16nm technology or more advanced to Chinese firms.

Meanwhile, despite U.S. export regulations, SMIC, the only foundry in China capable of producing 14nm and 7nm-class chips, has long been on the U.S. Department of Commerce’sCommerce’sst and thrives thanks to government support and Huawei orders.