U.S. AMAT Fined 360 Billion Won for Exporting Semiconductor Equipment to China via Korea

Second-Largest Fine Ever Imposed by BIS

Results of sanctions against Applied Materials posted on the website of the Bureau of Industry and Security (BIS) under the U.S. Department of Commerce. BIS

Applied Materials, a U.S. semiconductor equipment company that had been supplying equipment through its Korean subsidiary in order to circumvent U.S. export control regulations on semiconductor shipments to China, has been hit with a fine amounting to 360 billion won. It is the second-largest fine ever imposed by the Bureau of Industry and Security (BIS).

On February 11 (local time), the BIS under the U.S. Department of Commerce announced that it had reached a settlement with Applied Materials Inc. (AMAT) and Applied Materials Korea (AMK) in connection with the illegal export of U.S.-origin semiconductor manufacturing equipment to China.

The two companies agreed to pay a fine of about 252 million dollars (approximately 360 billion won), which is the second-largest amount ever imposed by the BIS. The only larger case was in 2023, when Seagate was fined 300 million dollars for selling hard drives to Huawei.

According to the BIS, AMAT had been exporting ion implanters, a type of semiconductor manufacturing equipment, to the Chinese foundry (contract semiconductor manufacturing) company SMIC (Semiconductor Manufacturing International Corporation), which was added to the U.S. Department of Commerce export control list in 2020.

However, in 2021 and 2022 AMAT shipped this equipment to AMK in Korea for assembly and then exported it on to China, and in doing so failed to apply for or obtain the mandatory government licenses, thereby violating export control regulations 56 times. U.S. export control rules apply even when items are re-exported via a third country in this way.

The value of the equipment that AMAT and AMK illegally exported to China in this manner is about 126 million dollars (approximately 180 billion won). Under its regulations, the BIS can impose fines of up to twice the value of the illegal transactions.

Under the settlement, AMAT has agreed to audit its export control compliance program, and the BIS stated that the employees and senior executives responsible for the illegal exports are no longer employed by AMAT or AMK.

Both the previous Biden administration and the current Trump administration in the United States are tightening export controls in order to curb the development of China’s advanced artificial intelligence (AI) semiconductor technologies.

Meanwhile, as of the current time shortly before the close of trading, AMAT is changing hands at 329.41 dollars, down 3.08% from the previous session’s close.

This content was produced with the assistance of AI translation services.