Applied Materials, the world’s largest semiconductor equipment supplier, announced it expects a $600 million impact on fiscal 2026 revenue after the U.S. government expanded restrictions on exports to China.
China is the largest market for Applied Materials with revenue of $2.548 billion in Q3 fiscal-2025, accounting for 35 percent of its total revenue.
Applied Materials has generated revenue of $1.843 billion from Taiwan, $1.16 billion from Korea, $713 million from Japan, $683 million from the United States, $160 million from Europe, and $195 million from South East Asia.
The company disclosed in a filing on Thursday that new rules will make it more difficult to ship certain products and provide services to specific Chinese customers without securing an export license.
The announcement sent Applied Materials’ stock down around 3 percent in extended trading, reflecting investor concerns over the broader impact of U.S. trade policy on the global chip supply chain.
U.S. Expands Export Blacklist to China Subsidiaries
The U.S. Department of Commerce widened its export blacklist earlier this week, targeting majority-owned subsidiaries of sanctioned companies. The move aims to prevent Chinese firms and other foreign entities from using affiliates to bypass U.S. export controls on sensitive technologies such as semiconductors, aerospace, and advanced medical equipment.
This expansion will significantly increase the number of companies requiring U.S. government approval to purchase American goods, software, and services, putting additional pressure on suppliers like Applied Materials and its European rival ASML Holding.
Immediate Impact on Revenue
Applied Materials expects the expanded restrictions to shave about $110 million from its fourth-quarter 2025 revenue. The projected $600 million hit in fiscal 2026 adds to concerns about sustained challenges in China, which has been one of the company’s most important markets for semiconductor equipment sales.
The company had already warned of slower sales and profits in August, citing weakness in China demand and ongoing U.S. tariffs. The latest export restrictions deepen uncertainty around supply chains and global chip production.
On August 14, 2025, Applied Materials CEO Gary Dickerson said: “We are operating in a dynamic macroeconomic and policy environment, which is creating increased uncertainty and lower visibility in the near term, including for our China business.”
U.S. Push for Domestic Chip Production
Amid escalating trade tensions, U.S. Commerce Secretary Howard Lutnick emphasized Washington’s efforts to reduce reliance on Taiwan’s chip industry by seeking a 50-50 manufacturing split between the U.S. and Asia. The move is part of broader strategies under the CHIPS and Science Act, which aims to strengthen domestic semiconductor production capacity.
Applied Materials Financial Performance
Despite regulatory challenges, Applied Materials posted Q3 2025 revenue of $7.30 billion, up 8 percent year-over-year. For fiscal 2024, revenue grew 2.5 percent to $27.18 billion, reflecting steady demand for advanced chip equipment across markets outside of China.
Baburajan Kizhakedath