TLDR

Applied Materials will pay $252 million to settle charges for illegally exporting chipmaking equipment to China’s SMIC between 2020 and 2023.
The company made 56 illegal shipments worth $126 million by routing ion implanters through its South Korean subsidiary to avoid export restrictions.
SMIC was added to the U.S. Entity List in December 2020 over ties to the Chinese military, requiring special export licenses.
The penalty equals twice the transaction value and is the maximum allowed by law under Commerce Department regulations.
Both the Department of Justice and SEC closed their related investigations without taking action against the company.

Applied Materials agreed to pay $252 million on Wednesday to settle charges it illegally shipped semiconductor manufacturing equipment to China’s largest chipmaker. The settlement resolves a multi-year investigation into export control violations.

Applied Materials, Inc., AMAT

The U.S. Department of Commerce’s Bureau of Industry and Security accused the company of 56 violations. These occurred between 2020 and 2023. The Santa Clara-based equipment maker shipped ion implanters to Semiconductor Manufacturing International Corp without proper authorization.

Ion implanters are critical pieces of equipment used in chip manufacturing. They modify silicon wafers during the production process.

Applied Materials used a workaround to avoid export restrictions. The company manufactured the equipment in Massachusetts. It then shipped the gear to its subsidiary in South Korea for assembly. From there, the equipment went to SMIC in China.

The Export Restriction Background

The Commerce Department added SMIC to its Entity List in December 2020. The restriction came over the Chinese company’s apparent ties to the military. Companies on the Entity List require special export licenses for U.S. technology and goods.

Applied Materials never applied for or received the required licenses. The company made illegal shipments totaling about $126 million in value to SMIC during 2021 and 2022.

Reuters first reported the criminal investigation in 2023. The news outlet detailed how Applied Materials routed equipment through South Korea to reach China.

Maximum Penalty Imposed

The $252 million fine represents twice the transaction value. This is the maximum penalty allowed under Commerce Department law. It stands as the second-highest export violation penalty ever levied by the Bureau of Industry and Security.

Seagate Technology received a $300 million fine in 2023 for selling hard disks to Huawei. That remains the largest export control penalty on record.

Applied Materials said it was pleased to reach a settlement. The company noted that both the Department of Justice and Securities and Exchange Commission closed their investigations without taking action.

The Justice Department did not respond to requests for comment. The SEC declined to comment on the matter.

Applied Materials had previously warned investors that strict U.S. export controls on China would hurt sales. Both the Biden and Trump administrations implemented tough restrictions on chip technology exports to China. The measures aim to slow Beijing’s development of artificial intelligence capabilities.

The settlement resolves all pending federal investigations into the export violations. Applied Materials can now move forward without the legal uncertainty that hung over the company since the investigation began.

The post Applied Materials (AMAT) Stock: Company Settles $252 Million China Export Violation Case appeared first on CoinCentral.

---

Filed under: News - @ February 12, 2026 10:31 am