The chip manufacturing technology supplier, Applied Materials
APPLIED MATERIALS
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said that the export restrictions to China will cause a loss of 250-550 million dollars in net sales in the current quarter that will end on October 30, and apparently a similar effect is possible in the following quarter as well.
Under sweeping new regulations announced by the Biden administration on Friday, American companies are required to stop supplying Chinese chipmakers with equipment that can produce chips defined as advanced, unless they receive a special license to do so. For Applied Materials this is a severe blow since in 2021 alone the total sales to China accounted for approximately 29% of the company’s revenues.
Applied Materials said that the restrictions will reduce the company’s net sales by approximately $400 million more or less in the fourth quarter. Adjusted earnings are expected to be $1.54 to $1.78 per share, down from a previous forecast of $1.82 to $2.18.
As a result, the company revised its revenue forecast for the fourth quarter to $6.15 billion to $6.65 billion, compared to the previous forecast of $6.25 to $7.05 billion and lower than analysts’ estimate of $6.67 billion. “Applied is pursuing additional export licenses and authorizations if necessary,” the company said.
The expected new difficulties at Applied Materials come as the global chip industry is still dealing with the effects of the post-coronavirus drop in demand for computers, smartphones and other electronic devices.
Since the beginning of the year, Applied Matrills shares have fallen by about 52.5% to $76, which represents a market value of about $65.4 billion.
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