Before the market opened on October 26, 2022, Seagate Technology Holdings plc announced financial results for the quarter ending September 30, 2022. Minutes later Seagate disclosed that the company had been warned by the U.S. government of its potential violation of export control laws by selling hard disk drives to a customer on a trade blacklist, which is believed to be China’s Huwei.
Huwei is on the U.S. Commerce Department's entity list and banned from buying U.S. exports and certain foreign-made items without government approval. Seagate received a “proposed charging letter” from U.S. Commerce Department on August 29, 2022. Seagate’s position is that the hard disk drives are not subject to the U.S. export regulations, and it did not engage in prohibited conduct.
Seagate had previously paused shipments to Huwei a year ago.
Shares of Seagate Technology Holdings plc stock dropped more than 10% in intraday trading after the market opened on October 26, 2022.
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