Electronics maker Flex 'seized' $100 million of Huawei goods in China

Electronics manufacturer Flex held up goods worth some 700 million yuan (USD 101.85 million) of its Chinese client Huawei Technologies for more than a month after Washington put Huawei on a trade blacklist, China’s Global Times reported on Thursday.

Flex kept the Huawei assets in its factory in the southern city of Zhuhai after Washington added Huawei to an Entity List on May 16 that prohibits US firms from doing business with it, according to the report.

Flex, which is dual-headquartered in the United States and Singapore and manufactures smartphone and 5G base stations for Huawei, did not immediately respond to an email seeking comment outside US business hours and did not answer calls to its Zhuhai office.

Guo Fulin, president of international media affairs at Huawei, told Reuters the company has retrieved some 400 million yuan of goods after negotiations with Flex last month and is still trying to get back the rest.

“We cannot understand why their Chinese factory seized our goods. This is an over-interpretation of the ban,” he said.

The Chinese newspaper said Flex has been removed from Huawei’s supply chain due to the incident that had “angered Huawei”, but Guo declined to comment on that.

In May, Huawei was added to the Entity List on national security grounds which barred it from buying US goods and services. According to a Goldman Sachs estimate here, Huawei contributed nearly 2.5 billion yuan, or 5 percent of Flex's total revenue in the third quarter of 2018.

While Washington has given Huawei a temporary reprieve from the ban and US President Donald Trump signaled he could be relaxing the curbs, it has already rattled the global technology supply chain tied to Huawei’s USD 105 billion business that spans telecom equipment and smartphones.

The ban has also caused confusion among global companies and even academic bodies as the restrictions on their engagement with Huawei were unclear. US delivery firm FedEx sued the American government last month after the company’s mishandling of Huawei packages caused a public uproar in China.