On November 14, the latest news reported that Applied Materials stated that due to tightening U.S. export controls limiting its market access, it expects its chip manufacturing equipment spending in China to decline by 2026, although overall revenue is expected to grow in the second half of the year.Despite the anticipated suppression of demand due to tightened U.S. export controls, strong memory production related to the surge in artificial intelligence (AI) investment is expected to partially offset this impact.Applied Materials’ Chief Financial Officer Brice Hill stated, “Our customers indicate that spending on wafer fabrication equipment may accelerate starting in the second half of 2026.”In October, Applied Materials predicted that due to the expansion of U.S. export controls, the delivery of certain products and services to Chinese customers has become more complicated, resulting in a revenue decrease of $600 million for fiscal year 2026.The company stated that due to a related company rule, approximately $110 million worth of products failed to be delivered in the fourth quarter. This rule was suspended after talks between U.S. and Chinese leaders. These products will be shipped within the three months ending in January 2026 and have been included in the forecast.The company forecasts revenue for this fiscal quarter to be $6.85 billion, with a fluctuation of $500 million. According to data compiled by the London Stock Exchange Group (LSEG), analysts expect an average revenue of $6.76 billion; excluding one-time items, the company predicts earnings per share of $2.18, with a fluctuation of $0.20, higher than the previous expectation of $2.13.Executives also confirmed that the suspension of the related company rule will restore approximately $600 million in sales for the company throughout the fiscal year. Applied Materials CEO Gary Dickerson stated that due to the strengthened U.S. controls, Applied Materials can no longer supply equipment to the storage chip and mature chip manufacturing markets in China, but he does not expect to impose new significant restrictions on shipments to China.In recent years, Applied Materials’ sales in China have dropped from nearly 40% of total revenue to around 20%. Gary Dickerson stated that foreign competitors are still selling products to Chinese companies that Applied Materials cannot serve.Gary Dickerson stated, “Non-U.S. equipment companies are not subject to the same restrictions, so restricted customers can purchase products from these companies, even if they would prefer to buy from Applied Materials.”Applied Materials has stated that the new regulations will make it more difficult to export certain products and provide specific parts and services to certain Chinese customers without a license.Source: Daily IC