US-based hard disk drive suppliers face further scrutiny over whether they've shipped proscribed HDDs to Huawei
The Wicker man: US Commerce Committee senator questions Toshiba, Seagate and WD
Updated US Commerce Committee Senator Roger Wicker is on a mission to find out if HDD makers stateside are shipping drives to Huawei, and has fired off questions to Seagate, Toshiba America Electronic Components (TAEC) and Western Digital.
This follows the initiation of a US Department of Commerce (DoC) investigation in March into the possible supply of Seagate HDDs to Huawei.
At the time we asked Seagate whether it was shipping disks to the much-maligned Chinese tech biz and it responded by saying it "complies with all applicable laws including export control regulations", and "We do not comment on specific customers."
Wicker has written a fact-finding letter to the CEOs of the three HDD companies asking four specific questions:
- Does your company believe that the Final Rule prohibits shipment of hard disk drives to Huawei or any affiliate without a license? Please explain.
- Has your company continued shipping hard disk drives that are the direct products of technology or software subject to the EAR in question to Huawei or any affiliate after September 14, 2020? If yes, please explain.
- Has your company submitted a licensure application to ship covered products to Huawei or any affiliate after September 14, 2020? If yes, please also explain the status of your application.
- Does your company incorporate semiconductor products into its hard disk drives that the supplier knows or should know would then be incorporated into hard disk drives for subsequent shipment to Huawei or any affiliate?
The companies are requested to respond to Robert Turner, the committee's chief of investigations, by the close of business on 21 May, giving them nine days from today.
The “Final Rule” refers to the DoC issuing an instruction in August 2020 “to tighten Huawei’s ability to procure items that are the direct product of specified US technology or software, such as hard disk drives.”
Western Digital, which also sold HDDs as well as NAND chips and SSDs to Huawei, stopped doing so in June 2019 after the US Department of Commerce put Huawei on a trade blacklist and defined rules for trading with companies on the list.
Such companies cannot obtain semiconductor “chips developed or produced from US software or technology to the same degree as comparable US chips.”
Any US company that sells a product subject to US DoC export control that was developed or made using US IP, software, technology or equipment to such companies, including Huawei and its affiliates, needs to obtain a licence.
Bob Eulau, the then-CEO, told a Deutsche Bank 2020 Virtual Technology Conference, in autumn 2020, that WD had halted shipments to Huawei and applied for both HDD and SSD shipment licences.
According to a WD representative we emailed today, it is still waiting for that licence. A WD spokesperson told us it intended "to cooperate with Ranking Member Wicker’s inquiry process", adding: "We stopped shipping to Huawei in mid-September 2020 to comply with new rules issued by the Department of Commerce. We requested a license to ship products to Huawei in September 2020. Our application is still pending."
Seagate’s CFO, Gianluca Romano, said on a September 2020 Deutsche Bank call that Seagate was evaluating the situation and had not applied for any licence.
He said at the time: "I don't see any particular restriction for us in terms of being able to continue to ship to Huawei."
We have asked Seagate about this.
TAEC’s stance is unknown.
Wicker is a ranking member of the US Senate Commerce, Science, and Transportation Committee. That means he is the most senior member from a minority party; the Republicans in this case.
He closes his letter by saying: “I encourage the Department to take deliberate and robust action against any company found to be circumventing any part of it [the Final Rule] - especially considering the serious harm that Huawei poses to American security interests.”
We have contacted Seagate, TAEC and WD for comment. ®
Updated at 2123 UTC on May 12 to add
Toshiba has refused to comment.