Applied Materials Sees $710M Hit From China Curbs. Here’s What You Should Know

Applied Materials (AMAT) said it expects a $710 million revenue hit from new restrictions on its China exports, pressuring shares of the chip manufacturing equipment maker Friday.

The Commerce Department’s Bureau of Industry and Security issued a rule on Sept. 29 that the Santa Clara, Calif.-based company said will “further restrict its ability to export certain products and provide certain parts and services to specific China-based customers without a license.”

Applied Materials said the new rules would reduce its fourth-quarter net revenue by $110 million, and fiscal 2026 revenue by around $600 million.

Before the BIS Affiliates Rule earlier this week, U.S. companies would only need licenses when selling their products to certain companies on what’s known as the entity list. Now, American firms would need licenses even for companies that are 50% or more owned by the companies on the list, according to the BIS, a move that it said “closes a significant loophole.” 

China accounted for more than a third of Applied Materials’ total revenue in its fiscal third quarter ended in July, making the country its biggest source of sales.

Applied Materials shares are falling 3% in early trading Friday but are up almost 35% this year.

Analysts said its rivals are not likely to be hit as hard by the new rules. “The first question is whether other equipment companies are impacted – the answer, we think, is yes – but the magnitude we think varies fairly significantly,” UBS analysts wrote in a note Thursday.

They said Lam Research (LRCX) could face a maximum annualized impact of $300 million from the new rule and KLA (KLAC) would be affected “even less.”  Lam Research shares are little changed in early trading while those of KLA are down 1%.

Shares of ASML (ASML), the biggest chip-gear maker, are little changed in early trading. The Dutch company’s extreme ultraviolet (EUV) lithography machines that help make advanced AI chips already couldn’t be exported to China due to Dutch government restrictions.

UPDATE—Oct. 3, 2025: This article has been updated with the latest share price information and a UBS comment on likely impact on other chip-gear makers.