Semiconductor Sector Faces Headwinds on New US Export Curbs
Applied Materials forecasts a $600 million revenue hit, signaling broader disruption for the global chip industry amid escalating US-China tech tensions.
The global semiconductor industry is bracing for renewed turbulence after the United States government enacted stricter export controls, triggering a significant revenue warning from key equipment supplier Applied Materials and signaling a bearish outlook for the sector.
Applied Materials announced that the new regulations from the Bureau of Industry and Security (BIS) are expected to reduce its fourth-quarter net revenue by $110 million, with a projected fiscal 2026 impact of approximately $600 million. The company's stock saw a 2% decline following the disclosure. These measures are designed to close existing loopholes, specifically targeting sales to companies that are 50% or more owned by entities on the U.S. government's trade restriction list.
The is seen as a bellwether for the wider industry, which is deeply enmeshed in the geopolitical rivalry between Washington and Beijing. The regulations are part of a broader strategy to curtail China's access to advanced technology, particularly in AI and quantum computing. The now encompass a wider range of equipment and high-bandwidth memory (HBM) crucial for AI development.
Analysts note that these restrictions are accelerating a "technological decoupling," forcing a major realignment of global supply chains. While the policy aims to address national security concerns, it also creates significant headwinds for US-based firms that rely on the Chinese market. The move is expected to galvanize , intensifying its state-led investments in domestic production capabilities. For the global market, the long-term outlook points toward a more fragmented and potentially less efficient semiconductor landscape as companies navigate an increasingly complex regulatory environment.