Applied Materials projects weaker semiconductor equipment revenue - UPI.com
upi.com -- Friday, August 15, 2025, 2:28:12 PM Eastern Daylight Time
Categories: U.S.–China Relations, Economic Policy & Jobs, Trade Policy & Tariffs
Aug. 15 (UPI) -- Applied Materials' stock price slumped by double digits on Friday after the semiconductor equipment maker reported a projected decline in revenue amid tariff worries in China.
On the Standard and Poor's 500 index, the company's stock decreased 11% at the opening bell and was trading at $162.09, down 13.87%, at 2 p.m. Entering trading, Applied Materials was up more than 15% for the year. The stock reached $199.29 on July 15 with the record $235.99 in April 2024.
The company, based in Santa Clara, Calif., reported the sixth consecutive quarter of revenue growth, including $7.3 billion in the third quarter, but foresees a weaker situation in the next quarter. They initially projected $6.7 billion in revenue for the quarter.
"We are expecting a decline in revenue in the fourth quarter driven by both digestion of capacity in China and non-linear demand from leading-edge customers given market concentration and fab timing," Brice Hill, senior vice president and CFO at Applied Materials, said. "We are navigating and adapting to the near-term uncertainties by leveraging our robust supply chain, global manufacturing footprint and deep customer relationships."
CEO Gary Dickerson, during an earnings call with analysts, said the current macroeconomic situation and trade issues have fueled "increasing uncertainty and lower visibility," mainly within its business in China.
In addition, he said their forecast does not account for pending export license applications and a substantial backlog of products.
Dickerson noted the easing of spending from customers, with Chinese clients cutting spending after increasing equipment manufacturing in the region.
President Donald Trump has proposed a 100% tariff on semiconductors and possibly a 300% rate. Exempt companies would be those with manufacturing facilities in the United States.
Applied Materials doesn't make chips, and instead supplies equipment, services and software used by the makers of the chips. The company's largest plant for logistics and logistics is in Austin, Texas.
On Monday, Trump extended a tariff pause until Nov. 10 on products sent to the United States from China. Originally, he threatened 145% duty, but it was later lowered to 30% plus the baseline tariffs imposed on nearly all U.S. trading partners. The baseline remains in effect.
In June, Trump announced a trade agreement with China over rare earth minerals. Under the deal, China would export rare earth minerals to the United States with both countries reducing their tariffs for 90 days. Rare earth minerals fuel energy sources for mobile devices and electric vehicles.
Despite uncertainty, Applied Equipment in its report wrote that "we remain very confident in the longer-term growth opportunities for the semiconductor industry and Applied Materials.
The company's adjusted earnings of $2.11 per quarter was short of the $2.39 expected by LSEG.
Net income hit $1.78 billion, or $2.22 per share. One year ago, it was $1.71 billion, or $2.05 per share.
The gross margin was 48.8% compared with 47.3% one year ago, and the operating margin was 30.6% vs. 28.7% in 2024.
The company specializes in materials engineering solutions for semiconductors, flat panel displays and solar photovoltaic industries. The company's revenue in semiconductor equipment is No. 1 in the world, followed by the Dutch company ASML.
Sales at all three Applied Materials units rose: Semiconductor Systems at $5.43 billion, Applied Global Services at $1.60 billion and and Display t a$263 million.
The company's market capitalization is $151.06 billion. It was founded in 1967 as a startup.
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Sign Our PetitionThe recent announcement from Applied Materials regarding a projected decline in semiconductor equipment revenue highlights a critical intersection of corporate interests, international trade policy, and the broader implications for the economy and working-class Americans. The 11% slump in stock prices following the revelation of dwindling revenues amidst tariff uncertainties in China serves as a stark reminder of how intertwined global supply chains are with the domestic economy. This situation is emblematic of the precariousness faced by workers and businesses alike, caught in the crossfire of escalating trade tensions, particularly under the previous administration, which introduced punitive tariffs that have yet to be resolved.
Historically, the semiconductor industry has been a bedrock of technological innovation and economic growth in the United States. However, over the past few decades, the shift towards globalization has meant that manufacturing and supply chains have increasingly migrated overseas, often to countries like China, where labor costs are lower. This transition has not only led to significant job losses in American manufacturing but has also created vulnerabilities within the supply chain itself. The current predicament faced by Applied Materials serves as a reminder of this historical trend, as companies grapple with the repercussions of offshoring key components of their supply chains. The implications of this are particularly relevant when discussing economic policy and the need for a more balanced approach that prioritizes domestic job creation and security.
The potential for a 100% tariff on semiconductors proposed by former President Trump raises serious questions about the direction of trade policy and its impact on American consumers and businesses. Such tariffs could lead to increased prices for semiconductors, which are essential components in everything from smartphones to electric vehicles. Moreover, the proposed tariffs would disproportionately affect consumers while benefitting large corporations with the resources to absorb costs or relocate production. This dynamic illustrates the fundamental inequity within our economic system, where corporate interests often overshadow the needs of everyday Americans, particularly those in the manufacturing sector who have already experienced significant hardships due to previous trade policies.
Furthermore, the ongoing uncertainty surrounding Applied Materials' revenue projections underscores the broader instability that can arise from erratic trade policies. The "non-linear demand" from leading-edge customers and the "digestion of capacity in China" outlined by the company's CFO reflect a larger trend in the semiconductor industry, where volatility is becoming the norm. This unpredictability not only affects corporate bottom lines but also impacts the livelihoods of workers dependent on these industries. The historical context of labor struggles in manufacturing, particularly in the wake of outsourcing and globalization, reinforces the need for a more equitable approach that prioritizes stable employment and fair wages over short-term corporate profits.
In light of these developments, it is essential for advocates of economic justice to engage in discussions about the future of manufacturing, trade policy, and workers' rights. The enduring struggle for a fair economy requires a reevaluation of how we structure trade agreements, support domestic industries, and protect the rights of workers. As we move forward, it is crucial to remember the lessons of history, particularly the consequences of prioritizing corporate interests over the well-being of the workforce. By advocating for policies that support sustainable job growth, fair wages, and equitable trade practices, we can work towards a more just economy that benefits everyone, not just a select few at the top.
The recent report from Applied Materials regarding projected declines in semiconductor equipment revenue is a critical reflection of the broader economic landscape shaped by geopolitical tensions, particularly between the United States and China. This scenario is emblematic of the challenges faced by American companies that are interwoven with global supply chains and reliant on international markets. The projected downturn, despite consecutive quarters of revenue growth, indicates a vulnerability that must be understood in the context of historical trade policies and the current economic climate. The situation presents an opportunity for Americans to reevaluate their stance on trade, tariffs, and the fostering of domestic industries.
Historically, the semiconductor industry has been at the forefront of technological innovation and economic growth in the United States. The post-World War II era saw the U.S. emerge as a leader in semiconductor technology, spurred by government investment and research initiatives. However, in recent decades, the landscape has dramatically changed. The globalization of the economy has led to a shift in manufacturing capabilities, with many semiconductor companies outsourcing production to countries with lower labor costs, notably China. This dependence on foreign manufacturing, coupled with the current tariff threats proposed by former President Trump, raises significant questions about the sustainability of American jobs and industries. The reality is that tariffs can lead to short-term gains but often result in long-term economic instability and increased consumer costs.
As we analyze the implications of these developments, it becomes clear that Americans have a responsibility to advocate for policies that prioritize long-term economic security over short-term gains. This involves pushing for a more nuanced approach to trade policy—one that emphasizes cooperation over confrontation. Citizens can engage with their local representatives to advocate for legislative measures that support domestic manufacturing, including investments in research and development, education in STEM fields, and incentives for companies to bring production back to the United States. By fostering a supportive environment for innovation, we can mitigate the risks associated with fluctuating foreign markets and create more stable employment opportunities for American workers.
Moreover, the situation with Applied Materials serves as a critical reminder of the interconnectedness of global markets. Tariff policies that aim to isolate the U.S. economy from international trade can lead to unintended consequences, such as increased prices for consumers and greater economic uncertainty. Engaging in informed discussions about the implications of protectionist measures can empower individuals to articulate the need for a balanced approach that accounts for both national interests and global interdependence. It is essential to emphasize that a strong economy is not solely built on isolationism; rather, it thrives on collaboration and partnerships that foster innovation and growth.
Finally, the challenges faced by Applied Materials and the semiconductor industry call for a collective effort to reshape our economic narrative. As Americans, we must recognize that the future of our economy is intertwined with global dynamics. By supporting initiatives that encourage sustainable trade practices, investing in domestic industries, and fostering educational programs that prepare the workforce for emerging technologies, we can build a resilient economy that benefits all. This is not just a matter of corporate profits; it is about ensuring that the American workforce is equipped for the future and that our economy remains competitive on a global scale. Engaging in these discussions and advocating for constructive policies can empower citizens to influence the direction of our economy positively.
Analyzing the implications of the recent decline in Applied Materials' revenue projections and the broader context of semiconductor industry challenges can lead to actionable steps for individuals concerned about economic stability, trade policies, and technological advancement. Here’s a detailed list of ideas and actions that can be taken:
### What We Can Personally Do About This:
1. **Educate Ourselves and Others**: - Stay informed about the semiconductor industry, trade policies, and their implications for the economy. Share articles, facts, and statistics with friends and family to raise awareness about the importance of maintaining a strong domestic tech industry.
2. **Support Local and National Initiatives**: - Advocate for policies that promote the growth of the semiconductor industry in the U.S. This includes supporting initiatives for funding research and development, manufacturing incentives, and workforce training programs.
3. **Engage in Political Advocacy**: - Reach out to your elected officials to express your concerns about tariffs, trade agreements, and their impacts on the semiconductor supply chain.
### Exact Actions We Can Take:
1. **Petition for Fair Trade Practices**: - **Sign Petitions**: Look for petitions on platforms like Change.org that advocate for fair trade practices and support local manufacturing. Example: Search for petitions related to semiconductor tariffs or trade policies affecting the technology sector. - **Create a Petition**: If one does not exist, consider starting a petition that calls for revising trade policies that disproportionately affect American companies reliant on semiconductor equipment.
2. **Contact Elected Officials**: - **Who to Write To**: - **Senator Alex Padilla (CA)**: - Email: padilla.senate.gov/contact - Phone: (202) 224-3553 - Mailing Address: **112 Hart Senate Office Building, Washington, DC 20510** - **Senator Mark Warner (VA)**: - Email: warner.senate.gov/public/index.cfm/contact - Phone: (202) 224-2023 - Mailing Address: **703 Hart Senate Office Building, Washington, DC 20510** - **Representative Anna Eshoo (CA-18)**: - Email: eshoo.house.gov/contact - Phone: (202) 225-8104 - Mailing Address: **2020 Rayburn House Office Building, Washington, DC 20515**
- **What to Say**: - Express your concerns about the impact of tariffs on the semiconductor industry and how it affects local jobs and technologies. - Advocate for legislative support that encourages research funding and manufacturing incentives within the United States. - Request transparency regarding trade agreements and their long-term implications on the economy.
3. **Support Relevant Organizations**: - Donate to or volunteer with organizations that advocate for technology and manufacturing growth in the U.S., such as: - **Semiconductor Industry Association (SIA)**: They focus on policy advocacy and can help amplify your voice. - **National Association of Manufacturers (NAM)**: Engage with local chapters to support manufacturing initiatives.
4. **Engage in Community Action**: - Attend town hall meetings or community forums to discuss economic policies and trade issues. Bring attention to the local impacts of national trade policies. - Organize or join groups that focus on technology and economic issues, fostering discussions on local solutions and advocacy.
5. **Promote Local Tech Initiatives**: - Support local tech startups and initiatives that focus on semiconductor technologies and innovation. Engage with local incubators or innovation hubs that foster development in this sector.
By taking these steps, individuals can contribute to creating a more stable and prosperous tech environment while advocating for fair trade practices that support economic growth and innovation in the semiconductor industry.