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Tag: US Commerce Department

  • Seagate Cutting 3,000 Jobs, Accused of Selling to Huawei

    Seagate Cutting 3,000 Jobs, Accused of Selling to Huawei

    Seagate is facing bad news on two fronts, with the company cutting 3,000 jobs and facing accusations of violating US export restrictions.

    Seagate is one of the leading computer storage makers, but has been impacted by the economic downturn and lessening demand for personal computers. According to Bloomberg, the company is cutting 3,000 jobs as a result.

    “Global economic uncertainties and broad-based customer inventory corrections worsened in the latter stages of the September quarter, and these dynamics are reflected in both near-term industry demand and Seagate’s financial performance,” said Chief Executive Officer Dave Mosley. “We have taken quick and decisive actions to respond to current market conditions and enhance long-term profitability, including adjusting our production output and annual capital expenditure plans.”

    Potentially far worse for the company are accusations that it illegally sold hard drives to Huawei. Huawei is one of the companies the US Commerce Department has blacklisted over allegations it serves as part of Beijing’s spying apparatus. According to Reuters, Seagate was served a “proposed charging letter” from the Commerce Department over the alleged violation.

    Seagate maintained in a filing that its hard drives are not covered by the export restrictions, and it is therefore not guilty of violating US law.

    Only time will tell if Seagate’s position is correct, but the company clearly has some issues to address.

  • US Government Blacklists NSO Group Behind Pegasus Spyware

    US Government Blacklists NSO Group Behind Pegasus Spyware

    The US Commerce Department’s Bureau of Industry and Security (BIS) has added NSO Group to the Entity List, effectively blacklisting it.

    The NSO Group made headlines when The Washington Post reported that its Pegasus spyware was being used to target the smartphones — including the Apple iPhone — of journalists, political dissidents, and human rights activists around the world. The software is commonly used by law enforcement to target criminals, but the Post’s reporting revealed that NSO Group was also selling the software to regimes with a history of oppressive behavior.

    The reaction to the Post’s exposé has been swift, with companies severing ties to the group and regulators calling for investigations and action.

    The US Commerce Department has now added NSO Group to its Entity List, which prevents US companies from selling their technology to the company.

    “The United States is committed to aggressively using export controls to hold companies accountable that develop, traffic, or use technologies to conduct malicious activities that threaten the cybersecurity of members of civil society, dissidents, government officials, and organizations here and abroad,” US Secretary of Commerce Gina M. Raimondo said in a statement.

  • Huawei Running Out of Smartphone Chips Amid US Pressure

    Huawei Running Out of Smartphone Chips Amid US Pressure

    Huawei is facing a critical shortage of smartphone chips as a result of pressure from the US.

    In the aftermath of concerted efforts by US officials to isolate Huawei, the company is reporting that it is running out of smartphone chips and will soon have to stop production of its own Kirin chips, according to The Associated Press.

    Officials have maintained that Huawei represents a national security threat to the US and its allies. Among other things, there have been concerns over the unusually close ties between Huawei officials and Chinese intelligence. The US has banned Huawei and pressured allies to do the same.

    The US Commerce Department even modified the Entity List and Foreign Direct Product Rule to restrict Huawei’s access to needed technology. The Entity List and Foreign Direct Product Rule prohibits companies from buying products containing US technology, even if the manufacturer is a foreign company. This rule enabled the US to cut off Huawei from TSMC, one of their primary chip suppliers.

    Like Apple, Huawei uses outside contractors to manufacturer their chips. Being cut off from those contractors means the company is losing the ability to continue manufacturing them.

    “Unfortunately, in the second round of U.S. sanctions, our chip producers only accepted orders until May 15. Production will close on Sept. 15,” said Richard Yu, president of the company’s consumer unit. “This year may be the last generation of Huawei Kirin high-end chips.”