Applied Materials to pay $252 million over illegal exports to China
Applied Materials has reached a settlement with the US Department of Commerce’s Bureau of Industry and Security (BIS) over alleged violations of export regulations. The company will pay USD 252.5 million, the second-highest penalty ever imposed by BIS.
The case concerns shipments of semiconductor manufacturing equipment (ion implanters) to China between November 2020 and July 2022. The equipment was sent via Applied Materials Korea without the required export licenses after the Chinese customer was added to the Entity List. The merchandise involved was valued at approximately USD 126 million.
“The Bureau of Industry and Security is strongly committed to safeguarding sensitive American technologies and deterring wrongdoers. When companies export their products around the world, they must follow the law or face stiff penalties,” Under Secretary of Commerce for Industry and Security Jeffrey Kessler said in a press release.
The penalty of USD 252 million – twice the transaction value – is the maximum allowed by statute. As part of the settlement, Applied Materials will conduct audits of its export compliance program and provide annual certifications to BIS. Employees responsible for the shipments, including senior trade and production executives, have left the company.
The US Department of Justice and Securities and Exchange Commission have closed their related investigations without action. Applied Materials said the settlement concludes the US government's review and that the company remains committed to strong compliance practices.
"Applied Materials is pleased that the Department of Justice and SEC have closed their respective reviews, and that a civil settlement has been reached with the Department of Commerce, concluding the U.S. government’s review. Applied believes that resolving this matter is in the best interest of the company, its customers, employees and shareholders," Applied Materials writes in a press release.
