Core Viewpoint - Applied Materials, the largest semiconductor equipment company in the U.S., has announced a global layoff plan, cutting approximately 4% of its workforce, which translates to around 1,400 employees, to enhance operational structure and efficiency in response to market fluctuations and geopolitical challenges [1][3]. Group 1: Layoff Reasons - The layoffs are primarily driven by the significant decline in performance in the Chinese market due to U.S. export restrictions, which have severely impacted Applied Materials' revenue [3][5]. - The recent upgrade of export bans is projected to reduce revenue by $110 million in Q4 of FY2025 and by $600 million in FY2026 [3][5]. Group 2: Market Impact - At its peak, the Chinese market contributed over 45% of Applied Materials' total revenue, but this figure has now dropped to below 30% due to the inability to sell advanced equipment to China [5][7]. - The shift towards domestic semiconductor equipment in China is accelerating, with local companies increasingly adopting domestic alternatives, which may lead to a long-term loss of market share for Applied Materials [7][9]. Group 3: Competitive Landscape - Despite the rapid increase in domestic equipment usage, there remains a technological gap between domestic manufacturers and Applied Materials, indicating that further advancements are necessary for local companies to compete effectively [9].