© Reuters. FILE PHOTO: Applied Materials’ new corporate signage photo in Santa Clara, California, U.S. is shown in this image released on August 22, 2016. Courtesy Applied Materials/Handout via Reuters/File Photo(Reuters) -Applied Materials Inc said on Wednesday export curbs related to China’s chip industry would result in a net sales hit of $250 million-$550 million in the quarter ending Oct. 30, with a similar impact expected in the following three months.
The company’s shares dropped 1.5% in extended trade.
Under sweeping new regulations published by the Biden administration on Friday, U.S. companies must cease supplying Chinese chipmakers with equipment that can produce relatively advanced chips unless they first obtain a license.
Applied Materials said the regulations would reduce its fourth-quarter net sales by about $400 million, plus or minus $150 million. Adjusted profit is expected to be $1.54 to $1.78 per share, down from an earlier forecast of $1.82 to $2.18.
The company now sees net sales in the range of $6.15 billion to $6.65 billion in the fourth quarter, compared with the prior outlook of $6.25 billion to $7.05 billion and lower than analysts’ estimate of $6.67 billion.
“Applied is pursuing additional export licenses and authorizations where needed,” the company said in a statement.
The rules, some of which take immediate effect, build on restrictions sent in letters this year to top toolmakers KLA Corp, Lam Research Corp (NASDAQ:) and Applied Materials Inc (NASDAQ:), effectively requiring them to halt shipments of equipment to wholly Chinese-owned factories producing advanced logic chips.
