Applied Materials flags $600 million revenue hit in 2026 on broader chip export curbs

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(Reuters) -Chip equipment maker Applied Materials forecast a $600 million hit to fiscal 2026 revenue after the U.S. expanded its restricted export list in a blow to sectors such as semiconductors, aircraft and medical equipment.

Shares of Applied Materials fell about 3% in extended trading on Thursday after the company said in a filing the new rule would make it more difficult to export some products and supply specific parts and services to select China-based customers without a license.

The U.S. Department of Commerce on Monday widened the export blacklist to include majority-owned subsidiaries of listed companies, cracking down on companies in China and other countries that use units and affiliates to circumvent certain U.S. export curbs.

Applied Materials also expects an impact of about $110 million on fourth-quarter revenue.

The company and rivals such as ASML Holding were already under pressure from weakness in China and U.S. tariffs. In August, Applied Materials provided dour sales and profit forecasts for the fourth quarter.

The new rule is likely to disrupt supply chains even more and will greatly increase the number of companies that need licenses to receive American goods and services.

To boost domestic production of the chips and reduce reliance on Taiwan, U.S. Commerce Secretary Howard Lutnick told NewsNation that Washington’s pitch to the Asian chip powerhouse would be a 50-50 manufacturing split.

Applied Materials reported third-quarter revenue rose 8% to $7.30 billion from a year ago, beating estimates of $7.22 billion, per data compiled by LSEG.

The Santa Clara, California-based company’s revenue rose 2.5% to $27.18 billion for fiscal 2024.

(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Devika Syamnath)