US Commerce Dept. probes Seagate for Huawei sanctions ‘breach’

The US Department of Commerce has opened an investigation into Seagate, for possible sanction-busting disk drive shipments to Huawei. The probe centres on controller chips inside the drives, according to reports.

The Commerce Department imposed tougher sanctions on Huawei in August 2020, in order to “prevent Huawei’s attempts to circumvent US& export controls to obtain electronic components developed or produced using US technology This amendment further restricts Huawei from obtaining foreign made chips developed or produced from US software or technology to the same degree as comparable US chips.”

Companies can apply for a Department of Commerce license to ship products to Huawei. For example, Western Digital has applied for a license to sell disk drives and SSDs to Huawei, but in the meantime has stopped shipments to the company.

In September 2020, Seagate’s CFO, Gianluca Romano told a Deutsche Bank conference: “We are still going through the final assessment, but from what I have seen until now, I do not see any particular restriction for us in term of being able to continue to keep the Huawei or any other customers in China. So, we do not think we know we need to have a specific license.

We have asked Seagate about this investigation and a spokesperson said: “Seagate confirms that it complies with all applicable laws including export control regulations. We do not comment on specific customers.”

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