Seagate agreed to pay a fine of $300 million to authorities of United States for shipping hard disks from Huaweiin violation of the export control law.
According to the country’s Department of Commerce, Seagate shipped more than $1.1 billion worth of hard drives from the Chinese giant.
The case
Seagate sold the units to Huawei between August 2020 and September 2021 despite an August 2020 rule restricting sales of certain foreign items made with U.S. technology to the company.
As recalled, Huawei entered a U.S. trade blacklist in 2019 to curtail the sale of U.S. products to the company amid national security and foreign policy concerns. The move was primarily pushed by former President Donald Trump.
Seagate shipped 7.4 million units to Huawei for about a year after the 2020 rule went into effect and became the Asian company’s sole supplier of hard drives, the Commerce Department said.
The other two companies that were doing so, Western Digital and Toshiba, stopped shipping after the law was published.
“A mistake.”
According to the government, Seagate misinterpreted the foreign product rule to require evaluation of only the last stage of its manufacturing process rather than the entire process.
Seagate manufactured units in China, Northern Ireland, Malaysia, Singapore, Thailand, and the United States, as ordered, and used equipment, including test equipment, subject to the rule.
In August, the U.S. Department of Commerce sent the company a “proposed charge letter,” warning the company that it may have violated export control laws. The letter kicked off some eight months of negotiations.
The $300 million fine Seagate is payable in installments of $15 million per quarter for five years, with the first payment due in October.
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