Applied Materials Warns $710M Hit From Export Rule

Applied Materials said a new Commerce Department/BIS export rule will reduce its fiscal 2026 revenue by about $600 million and cut roughly $110 million from fourth-quarter revenue, a combined hit of about $710 million. The BIS rule expands controls to affiliates — companies at least 50% owned by an entity on the Commerce Department’s entity list — and says significant minority ownership will trigger extra due diligence, greatly increasing the number of firms that will need licenses. Applied said the change will constrain its ability to supply certain parts and services to select China-based customers and is likely to further disrupt semiconductor and related supply chains. The announcement pressured Applied shares, which fell about 3% in after-hours trading, even as the company recently reported a quarterly revenue beat and fiscal 2024 revenue of $27.18 billion. The development adds to headwinds for chip-equipment makers already facing weakness in China and comes amid broader U.S. efforts to curb sensitive technology exports while bolstering domestic chip production.