India, Oct. 9 -- The latest warning from Applied Materials (AMAT) underscores how deeply the U.S.-China technology standoff is reshaping the semiconductor equipment landscape. Applied disclosed that its fiscal 2026 revenue will drop by about $600 million due to expanded U.S. export restrictions.

The new rules extend licensing requirements to majority-owned subsidiaries of blacklisted firms, closing loopholes that allowed Chinese fabs to receive restricted components through affiliates. This adds fresh uncertainty for American, European, and Japanese toolmakers whose sales have relied heavily on China.

The reaction was swift-Applied's shares fell 3% in after-hours trading-signaling investor concern that the global equipment cycle may now...