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Applied Materials China revenue drops to 30 percent of total sales
Friday, February 13, 2026 at 02:40 AM
Applied Materials reported a 7% year-over-year decline in revenue from China, which now accounts for 30% of its total sales portfolio.
Context
Applied Materials reported that its revenue from China declined 7% year-over-year in the first fiscal quarter of 2026, now accounting for 30% of total sales. This shift reflects a retreat from recent peaks where China’s contribution approached 45% of the company’s business. The downturn is primarily driven by tightening U.S. export controls and a stabilization of domestic Chinese spending on mature-node equipment following years of aggressive capacity expansion.
Despite these regional headwinds, Applied Materials exceeded overall analyst expectations with $7.01 billion in total quarterly revenue. Management is increasingly pivoting toward AI-driven demand, projecting over 20% growth in its semiconductor equipment business for the 2026 calendar year. This strategy relies on leadership in leading-edge logic and high-bandwidth memory (HBM) to offset the narrowing addressable market in China and fuel a projected second-half recovery.
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