Wednesday, July 17, 2024

Seagate to pay $300 million for $1.1 billion hard disk drive sale to Huawei


Seagate Technology Holdings agreed to pay a $300 million fine in a settlement with US authorities for sending more than $1.1 billion worth of hard-disk drives to China’s Huawei in violation of US export control laws, the Commerce Department said Wednesday. Is.

Seagate sold the drives to Huawei between August 2020 and September 2021, despite a 2020 rule that prohibited the sale of certain foreign goods made with US technology to the company. Huawei was placed on a US trade blacklist, the Entity List, in 2019 to reduce sales of US goods to the company amid national security and foreign policy concerns.

The punishment represents the latest actions by Washington to keep sophisticated technology from China that could support its military, enable human rights abuses or otherwise threaten US security.

The Commerce Department said Seagate shipped 7.4m drives to Huawei for about a year after the 2020 rule took effect and became its sole supplier of hard drives.

The department said the other two primary suppliers of hard drives stopped shipments to Huawei after the new rule went into effect in 2020. Although they were not identified, Western Digital and Toshiba Corp were the other two, the US Senate Commerce Committee said in a 2021 report on Seagate.

The companies did not respond to requests for comment.

“Its competitors had stopped selling them … Seagate continued to send hard disk drives to Huawei,” Matthew Axelrod, assistant secretary for export enforcement at the Commerce Department’s Bureau of Industry and Security, said in a statement. “Today’s action is the result.”

Axelrod said the administrative penalty was the largest in the agency’s history not linked to a criminal case.

Seagate’s position was that its foreign-made drives were not subject to US export control regulations, essentially because they were not a direct product of American equipment.

Seagate Chief Executive Officer Dave Mosley said in a statement, “While we believed that we complied with all relevant export control laws at the time of sale of the hard disk drives, we determined that … to resolve this matter.” was the best course of action.” statement.