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Hard drive maker Seagate Tech faces China sanctions warning


Hard drive maker Seagate Tech faces China sanctions warning

American and Chinese flags wave at Genting Snow Park ahead of the 2022 Winter Olympics on February 2, 2022, in Zhangjiakou, China. The US Department of Commerce has warned that it could charge the computer hard drive maker with violating restrictions on exporting high-tech products to China, Seagate Technology said on Tuesday. Source: AP Photo / Kiichiro Sato, File

Seagate Technology said on Thursday the US Commerce Department had warned it could charge the computer hard drive maker with violating restrictions on exporting high-tech products to China.

The company said in filing with SEC that it denied the allegations. It says its hard drives are not subject to US Export Administration regulations, but troubles in the matter could affect their business.

“Seagate believes it has complied with all laws and regulations related to export control,” it said.

Seagate said the allegation was an excess of sales for the period between August 2020 and September 2021 to “one customer and its affiliates.” However, without naming customers, Seagate is a major supplier of hard drives to telecoms equipment giant Huawei Technologies, a key target of US export controls.

Another major provider, Western Digital, has discontinued sell with Huawei in 2019, not long after they signed a strategic partnership relations with the Chinese company, the largest manufacturer of network equipment for phone and internet service providers.

Huawei did not immediately respond to a request for comment.

When it reported lower profits and revenue for its fiscal first quarter, Seagate said it was reducing its headcount to 3,000 people as part of a restructuring process. It shows global uncertainties and slower demand.


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