$252 million will be paid by Applied Materials for illicit exports to China
The U.S. Department of Commerce has announced a $252
million settlement with semiconductor equipment maker Applied Materials
for illegally exporting chipmaking tools to China’s top chip manufacturer, SMIC
(Semiconductor Manufacturing International Corp).
According to the Commerce Department, Applied Materials
shipped restricted chipmaking equipment without getting the required U.S.
export licenses. The equipment included ion implanters, which are
critical machines used in semiconductor manufacturing.
Officials said the company produced the equipment in
Massachusetts and first shipped it to its South Korean subsidiary for assembly.
From there, it was sent to SMIC in China. These shipments happened even after
SMIC was placed on the U.S. government’s Entity List in December 2020
due to suspected links to the Chinese military. Companies must receive special
approval to export controlled technology to firms on that list.
The department said Applied Materials and its South Korean
unit made 56 illegal shipments in 2021 and 2022, with a total goods
value of about $126 million. The $252 million penalty equals twice
the value of the shipments, which is the maximum fine allowed under the
law.
Applied Materials said it is pleased to have reached a
settlement with the Commerce Department. The company also said that the U.S.
Department of Justice and the Securities and Exchange Commission (SEC)
have closed their related investigations without taking further action.
The Justice Department did not immediately comment, and the
SEC declined to comment.
The case follows earlier reporting that the company had been
under U.S. criminal investigation over these export activities.
