Huawei seeks compensation from Flex over withheld goods

Huawei Technologies said it was seeking compensation from its contract manufacturer Flex Ltd for illegally withholding some 400 million yuan ($57 million) worth of its goods in the wake of a U.S. trade ban on the Chinese firm.

Huawei spokesman Guo Fulin did not comment on the amount, but a person with direct knowledge of the matter said the company had sent a lawyer’s letter to Flex on Monday demanding “hundreds of millions of yuan” in damages for lost income, wasted materials, equipment replacements and other costs.

In the letter, Huawei says Flex’s Chinese unit “disregarded Chinese law” by refusing to return production equipment, raw materials and half-made products belonging to Huawei worth around 400 million yuan at its Zhuhai factory “for nearly two months” after Washington banned Huawei in May, the source said.

Headquartered in California, Flex is among the world’s largest electronic manufacturers and competes against Taiwan’s Foxconn Technology in providing contract services for Huawei products such as smartphones and 5G base stations.