[News] Applied Materials Faces $400M Revenue Loss as Part of Maintenance Services Halted in China

Export control headwinds are hitting the chip industry, with semiconductor equipment giant Applied Materials being one of the hardest struck. According to Bloomberg, the company has been forced to halt equipment maintenance services for some customers in China, leading to a $400 million revenue loss in FY2025.

About half of that impact will be reflected in the current quarter, the report adds. However, Applied Materials CEO Gary Dickerson expects service growth to recover in the long run, as per Bloomberg.

Stricter U.S. export controls have hit Applied Materials hard indeed. In Q1 FY25 (ending Jan. 26), China made up 31% of its sales, down from 45% in the same period in FY24.

The impact of U.S. chip curbs is also evident across the industry. In the latest quarter, China made up only 27% of ASML’s sales, down from 39% a year ago and 47% in the previous quarter.

On the other hand, Applied Materials reported quarterly revenue of $7.17 billion with a 7% year-over-year increase, with a profit of $2.38 per share, according to its press release. However, the company forecasts a lukewarm second quarter, with its revenue slightly declining to $7.1 billion.

According to Bloomberg, Applied Materials notes that the surge in orders from Chinese memory makers has not continued into 2025. Meanwhile, high demand for advanced equipment needed for AI components is offsetting weaker demand from makers of legacy chips.

According to Applied Material, in semiconductor systems, which contributed about three quarters of its revenue, sales from foundry-logic rose 20% year-over-year in the first quarter. While NAND revenue slightly increased 3% YoY, DRAM sales dropped 10%.

Read more

• [News] Applied Materials and Lam Research Reportedly Seek Alternatives to Chinese Components
• [News] ASML CEO Christophe Fouquet: U.S. EUV Export Ban Causes China’s Chip-Making to Lag by 10-15 Years

(Photo credit: Applied Materials)