Oct 12 (Reuters) - Chip-making technology supplier
Applied Materials Inc said on Wednesday export
restrictions to China would result in a $250 million-$550
million loss in net sales in the quarter ending Oct. 30, with a
similar impact expected in the following three months.
Under sweeping new regulations announced by the Biden
administration on Friday, U.S. companies must cease supplying
Chinese chipmakers with equipment that can produce relatively
advanced chips unless they first obtain a license.
Applied Materials became the first U.S. semiconductor
company to put a dollar figure to the perceived impact. The
company's stock was down 1.6% in extended trade.
China accounted for 29% of Applied Materials' total sales in
2021, according to Evercore ISI analyst C.J. Muse.
Sales of tool-makers including KLA Corp, Lam
Research Corp and Applied Materials are expected to be
affected by 5% to 10%, Muse wrote in a recent note, and that any
retaliatory measure from China could further impact revenue.
Applied Materials said the restrictions would reduce its
fourth-quarter net sales by about $400 million, plus or minus
$150 million. Adjusted profit is expected to be $1.54 to $1.78
per share, down from an earlier forecast of $1.82 to $2.18.
Consequently, it has revised fourth-quarter revenue outlook
to $6.15 billion to $6.65 billion, compared with the prior
forecast of $6.25 billion to $7.05 billion and lower than
analysts' estimate of $6.67 billion, according to Refinitiv
"Applied is pursuing additional export licenses and
authorizations where needed," the company said.
The company also said it recently received a subpoena from
the U.S. Attorney's Office for the District of Massachusetts
requesting information relating to its customers in China.
Applied Materials' warning comes as the global chip industry
already faces major headwinds from tumbling demand post-COVID in
computers, smartphones and other electronic devices.
(Reporting by Arunima Kumar and Yuvraj Malik in Bengaluru;
Editing by Krishna Chandra Eluri)