Applied Materials Inc. stock suffered a major decline after a disappointing sales and profit forecast due to US-China trade tensions. Revenue for the fourth quarter is expected to be $6.7 billion, below analysts’ estimates. CEO Gary Dickerson cited uncertainty from tariffs and delays in exporting technology to China affecting demand.

The outlook caused a 14% drop in Applied Materials shares, the largest decline in five years. The company’s revenue for the third quarter was $7.3 billion, higher than expected. Major customers like Taiwan Semiconductor and Samsung are delaying purchases amid trade negotiations and economic issues.

Applied Materials will invest over $200 million in a facility in Arizona as part of Apple’s US manufacturing plan. The company’s role in this program could strengthen its position as a key supplier of chipmaking tools for iPhones. CEO Dickerson is optimistic about increasing semiconductor supply in the US under the new administration.

Rival company Lam Research Corp. expects revenue to decrease in December, with Chinese customers potentially reducing spending. Applied Materials is facing a lawsuit from Beijing E-Town Semiconductor over alleged trade secret theft. Despite challenges, the demand for computing power remains strong in the long term.

Read more at Yahoo Finance: Applied Materials Suffers Worst Rout Since 2020 on China Woes