HPE said it saw “no indication” that its technology had been sold to the Chinese military
It comes after a company within its China-based joint venture New H3C – which is the exclusive supplier of HPE servers, storage, and associated technical services in the Middle Kingdom – was added to the list last week. United States entities banned for supporting the modernization of the People’s Liberation Army.
HPE’s entanglement with H3C dates back to its 2009 acquisition of network equipment maker 3Com, which in 2003 formed a joint venture in China with Huawei to target the Chinese market. The name H3C reflects this parentage – the H is for Huawei and the 3C stands for 3Com. In 2007, 3Com bought out Huawei’s stake in the joint venture.
When HPE took over 3Com a few years later, it therefore also acquired H3C. In 2015, HPE announced its intention to sell a majority stake in H3C to a majority-owned subsidiary of state-owned Tsinghua Unigroup.
We are contacting the Commerce Department to understand why this action was taken
This agreement firm in 2016, and HPE said it pocketed about $ 2.3 billion for a 51% stake in the company while retaining 49% of the stake. H3C has become the new H3C.
HPE remains proud of its stake in H3C – which sometimes stands out Press Releases that remind the world that it is the world’s largest server supplier in terms of revenue when its own sales and those of H3C are combined. Analyst firm IDC tracks H3C server sales alongside those of HPE when it calculate the market share, reflection of the fact that New H3C resells the HPE kit.
Which brings us to the revelation last week that one of New H3C’s businesses – New H3C Semiconductor Technologies Co. Ltd – has been added to the list of entities. US organizations can only interact with listed entities after obtaining a specific license. Such licenses are not easy to obtain, as inclusion on the entity list is usually a sign that the US government believes that a foreign organization poses some threat.
In the case of New H3C Semiconductor Technologies Co., Ltd., that threat was its support for the Chinese military.
HPE still does not know why New H3C Semiconductor Technologies Co. Ltd, which was formed in 2019, has been added to the list.
“We are contacting the Commerce Department to understand why this action was taken,” said a spokesperson. The register. “In view of the statutory holiday weekend in the United States, we have yet to have an opportunity to discuss this matter in depth with the Commerce Department.”
The HPE spokesperson said that a lack of advance warning “is not uncommon for this type of regulatory action.”
âAt this time, our due diligence does not suggest any indication that sales to the Chinese military have taken place,â the spokesperson added. âWe are working to understand why the Commerce Department has taken this step. We remain engaged with all relevant stakeholders to explore this issue. “
China responded to the expanded list of entities, calling it an abuse of state power motivated by an excessive definition of national security, and claiming that such actions are the source of problems in supply chains. global.
#China strongly opposes the last #WE list and demand that he correct his errors immediately. China reserves the right to take necessary countermeasures. China will take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises. pic.twitter.com/QKbY3yL0cl
– Lijian Zhao (@ zlj517) 25 November 2021
The register requested updates from HPE if it learns more about why New H3C Semiconductor Technologies Co. was added to the entity list. Â®