US authorities investigate Applied Materials for possible export restrictions against China, as insiders report. The prosecutor's office is currently investigating possible illegal deliveries of equipment worth several hundred million dollars to Chinese semiconductor giant SMIC, as reported by Reuters. Three unnamed sources confirmed the investigations, allegedly carried out through a subsidiary in South Korea.

Applied Materials emphasized its collaboration with the authorities and publicly disclosed a request from the prosecutor's office regarding this matter in October 2022. The Federal Prosecutor's Office in Boston neither confirmed nor denied this. So far, there has been no official statement from SMIC.

The United States has restricted the shipment of state-of-the-art computer chips and chip equipment to China for security reasons. This is to prevent Chinese military or intelligence services from obtaining American high technology. Following the announcement of the Reuters report and the latest financial figures on Thursday, shares of Applied Materials in NASDAQ trading on Friday temporarily recorded a decrease of 5.04 percent at a price of $147.01.

Experts emphasize that the suspicion of illegal exports poses a major risk to Applied Materials, as they rely on the Asian market. China is the world's largest market for semiconductors, an area where Applied Materials is a leading company. Over the past few years, the company has expanded its business relationships with SMIC and other Chinese customers to capitalize on the growth potential in China.

Uncertain Future for Business Relationship Between Applied Materials and SMIC due to Strict Export Restrictions and Ongoing Investigations. Consequences Could be Significant for Both Companies. Possible Solution Could be Applied Materials Completely Ceasing Equipment Export to China or Obtaining Authorized Exemptions from Authorities.

A violation of export restrictions could have not only financial but also legal consequences for Applied Materials. The risk of penalties from the US government and a decline in business with Chinese customers cannot be ruled out. The exact outcome remains to be seen, but the recent events could have long-term impacts on the business and reputation of Applied Materials.

The company's stocks have already responded to the news and investors are concerned about the possible consequences. It remains to be seen how the situation develops and whether further details of the investigations will be made known. A statement from SMIC or other involved parties is still pending at this time. The events will certainly continue to draw attention from investors and industry experts, while the future of Applied Materials and its business relationship with SMIC remains uncertain.