The U.S. Commerce Department announced Thursday that a U.S. company and its Korea-based subsidiary have agreed to pay a $252 million penalty for illegally exporting U.S. semiconductor manufacturing equipment to China.
The department’s Bureau of Industry and Security (BIS) announced a settlement agreement under which Applied Materials Inc. of Santa Clara, California (AMAT) and Applied Materials Korea, Ltd. (AMK) will pay the penalty, the second-highest amount ever imposed by BIS, News.Az reports, citing foreign media.
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AMAT had been exporting chipmaking equipment, known as ion implanters, to a Chinese firm, which was placed on the department’s “Entity List” for export controls in 2020.
The department said that in 2021 and 2022, AMAT shipped ion implanters first to AMK in South Korea for assembly and then onward to China without applying for and receiving an export license — a shipment in violation of BIS’ license requirement.
The value of merchandise shipped was approximately $126 million. The $252 million penalty — twice the transaction value — is the maximum allowed by statute, the department said.
“The Bureau of Industry and Security is strongly committed to safeguarding sensitive American technologies and deterring wrongdoers,” Under Secretary of Commerce for Industry and Security Jeffrey Kessler was quoted as saying in a release. “When companies export their products around the world, they must follow the law or face stiff penalties.”
As part of the settlement, AMAT agreed to conduct multiple audits of its export compliance program and make annual certifications to BIS in connection with those audits, the department said.
