Applied Materials, Inc. reaches settlement with Department of Commerce

Applied Materials, Inc. reached a civil settlement with the U.S. Department of Commerce’s Bureau of Industry and Security to resolve allegations tied to certain customer shipments to China, concluding the U.S. government’s review of those matters.

Applied said resolving the matter served the interests of the company, its customers, employees and shareholders, and that integrity and compliance were core to its operations. The company said it remained committed to maintaining export-control and trade-compliance practices across its global operations and was focused on executing its technology roadmap and supporting demand for next-generation semiconductors.

The Bureau of Industry and Security alleged that shipments to China between November 2020 and July 2022 did not comply with the Export Administration Regulations (EAR) because of a misunderstanding about the regulations’ applicability. The press release described the issue as stemming from that misunderstanding of how the EAR applied.

Under the terms of the settlement, Applied agreed to pay $252.5 million to the Department of Commerce. The U.S. Department of Justice and the U.S. Securities and Exchange Commission notified Applied that they had closed their related investigations without action.

“Applied Materials is pleased that the Department of Justice and Scope 1–3 Emission Calculator (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,” said Applied Materials. The press release contained forward-looking statements about the company’s business and growth strategies, industry outlooks, expected benefits of the settlement and the effectiveness of the company’s compliance programs.