Despite a supply ban, Seagate continued to work with Huawei to ship hard drives in 2020 and 2021.

Seagate can pay the US government $300 million after delivering to Huawei without a commercial license. In 2020-2021, it became the sole hard drive vendor after rivals Toshiba and Western Digital suspended all partnerships with Huawei.

In total, Seagate delivered 7.4 million hard drives to the conglomerate 429 times between August 2020 and September 2021. The manufacturer was not allowed to do this because it had not received a commercial license from the US government. According to the verdict (PDF), the total value of the contract was $1.1 billion. Seagate’s annual revenue in 2021 was $10.7 billion.

By mutual agreement, Seagate agreed to pay a fine of $300 million in quarterly installments of $15 million over five years. The fine would be twice as high as the expected net profit from the delivery of the hard drives.

Biggest penalty ever for BIS

This is the largest fine in US Bureau of Industry and Security (BIS) history. In a statement, the agency said the mutual agreement was a clear statement to other companies that they would respect the BIS export rules. She wants to create a level playing field for everyone while taking national security into account.

Since the export ban on Huawei came into effect in mid-2020, trade organizations have had to apply for a business license. Several parties got one, but Seagate never applied for it. They claimed at the time that it could trade freely with Huawei, which competitor Western Digital loudly denied.