Semiconductor equipment maker, Applied Materials, is currently facing a criminal investigation by the U.S. Justice Department. The investigation revolves around allegations that the company may have evaded the export restrictions imposed on China’s leading chipmaker, SMIC. It is believed that Applied Materials sent equipment to SMIC through South Korea without obtaining the necessary export licenses. The equipment involved is estimated to be worth hundreds of millions of dollars.
This investigation comes as part of the U.S. government’s efforts to restrict the shipment of advanced chips and chipmaking equipment to China due to national security concerns. The aim is to prevent Chinese military and intelligence capabilities from benefiting from U.S. technology. In October 2022, Applied Materials disclosed that it had received a subpoena for information regarding specific shipments to Chinese customers, and it has expressed its cooperation with the investigation.
The U.S. Attorney’s Office in Massachusetts is overseeing the investigation, although no charges have been filed at this point. It remains uncertain whether Applied Materials has violated any laws. Allegedly, the company produced semiconductor equipment in Massachusetts, which was then sent to South Korea before reaching SMIC in China. These shipments occurred after SMIC was placed on the U.S. Commerce Department’s “Entity List” in December 2020.
SMIC was added to the list due to suspicions of its ties to the Chinese military. However, SMIC denies these claims and insists that it serves civilian and commercial users. Both the Commerce Department and China’s embassy in Washington have declined to comment on the ongoing investigation. Meanwhile, a spokesperson for the Chinese foreign ministry criticized the U.S., accusing it of destabilizing the global semiconductor industry.
The outcome of the investigation and the potential consequences faced by Applied Materials are uncertain at this stage. It is important to note that no charges have been filed against the company thus far. As the probe continues, it remains to be seen how it will impact the company and its operations. Guam News Factor will closely monitor this situation and provide updates as they become available.
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