[News] Applied Materials’ China Sales Slide Amid U.S. Curbs, Guides Muted Q3 Outlook

Unlike Dutch chip tool giant ASML, which recently signaled stronger-than-expected demand from China, Applied Materials struck a more cautious tone for the current quarter, with U.S. export curbs and tariffs continuing to pressure sales in China, one of its key markets, according to Reuters and Bloomberg.

Amid a heated U.S.-China trade war, China accounted for 25% of Applied Materials’ Q2 sales—down from 43% a year earlier and 31% last quarter, the company’s data shows.

Applied Materials states in its press release that it is guiding revenue for the third quarter of FY2025 at around $7.2 billion and earnings near $2.35 per share. Meanwhile, for Q2 ended April 27, the chip gear giant reported $7.10 billion in revenue—slightly below estimates—but topped profit forecasts with $2.39 per share vs. $2.31, according to Reuters.

Advanced Chip Demand Fuels Second-Half Momentum

Reuters reports that Applied Materials is seeing a slowdown in the ICAPS market—IoT, autos, and sensors—but strong demand for advanced chips is helping to cushion the impact. Still, U.S. export curbs on chipmaking tools to China, its largest overseas market, remain a key challenge.

According to a Bloomberg report in February, the company has been forced to halt equipment maintenance services for some customers in China, leading to a $400 million revenue loss in FY2025.

Notably, Taiwan has emerged as Applied Materials’ largest market in Q2, accounting for 28% of total sales, surpassing Korea (22%), China (25%) and the U.S. (11%).

Despite short-term headwinds, analysts cited by Reuters believe Applied Materials can bounce back as spending on advanced nodes ramps up in late 2025 and into 2026.

Read more

• [News] Applied Materials Faces $400M Revenue Loss as Part of Maintenance Services Halted in China
• [News] Samsung and ASML Reportedly Scrap EUV Research Center in Hwaseong, Eyeing New Alternatives
• [News] ASML: China Sales Could Top 25% in 2025, but Homegrown EUV Still Years Off

(Photo credit: Applied Materials)