Seagate Technology, a major player in hard drive, disk, and read-write head manufacturing globally, boldly supplied over $1.1 billion worth of hard drives to Huawei during a period when the U.S. Department of Commerce intensified export controls on products destined for companies like Huawei.
Seagate's decision, despite facing a $2 billion fine and export privilege restrictions, reflects its resolute stance on the side of commercial interests. Why did Seagate make such a determined choice, even at the risk of hefty penalties? What is the underlying business logic and story?
Firstly, commercial interests were a key driving force behind Seagate's decision. As the world's largest communication equipment manufacturer, Huawei's enormous demand for hard drives presented a substantial business opportunity for Seagate, as it became Huawei's exclusive supplier in the hard drive sector. Huawei holds a commanding 44.5% share in the global market, offering Seagate significant business prospects within their collaboration.
Political pressure also played a role in Seagate's considerations. In recent years, the U.S. government's crackdown on Huawei has left many companies facing a dilemma. On one hand, companies are reluctant to lose Huawei as a significant client, and on the other hand, they are hesitant to offend the U.S. government. In this context, Seagate chose to adhere to its own business logic, bravely standing on the side of commercial interests—a decision that is not easy under the current international trade conditions.
As an example, Seagate is not the only company taking risks. Similar situations have been witnessed among several U.S. tech giants. Qualcomm explicitly stated its commitment to long-term supply of 4G chips to Huawei. Intel and Nvidia introduced special edition processors for Chinese customers, and some software giants developed special edition EDA software tools. This indicates that, facing the vast potential of the Chinese market, more U.S. companies are choosing to face challenges head-on and seek collaboration with Chinese enterprises.
![](https://i.ytimg.com/vi/VRdDrjTNUT4/maxresdefault.jpg)