Applied Materials, a major U.S.-based maker of chipmaking equipment, is currently under a criminal investigation by the Justice Department for allegedly bypassing U.S. export controls and shipping advanced chipmaking tools to SMIC, a major China-based foundry that is blacklisted by the U.S. government, reports Reuters. During its earnings call on Thursday, the company indicated that the investigation has been ongoing for well over a year.
This probe focuses on the accusation that Applied Materials shipped wafer fab equipment worth hundreds of millions of dollars to SMIC via South Korea, sidestepping required export licenses from the U.S. government. The report does not disclose which tools Applied Materials shipped to SMIC and when. The Justice Department is said to be investigating the transactions following the U.S. Commerce Department’s decision to add SMIC to its Entity List in December 2020 on national security grounds.