While Hynix Semiconductor Inc. Thursday disputed the European Commission's finding that 33 percent duties would be imposed on the DRAM maker, it has begun to fight back. The South Korean memory supplier claims that Infineon Technology AG and Micron Technology Inc., the two companies that separately spurred anti-subsidy investigations against it, have caused more harm than good.

German-based Infineon last summer charged that undue subsidies and market-distorting practices by Korean competitors lead to unfair competition in an already pressured market. In November 2002, Micron filed similar charges here in the U.S. that led the Commerce Department to propose 57 percent duties earlier this month.

Lead by Nanya Technologies, Taiwanese DRAM makers have since begun readying charges against Korean competitors, claiming the same unfair subsidies. Tokyo-based Elpida Memory Inc., too, has reportedly looked into filing complaints.

"The fact that both the U.S. and EU have made positive initial rulings, and that other countries such as Japan and Taiwan are considering pursuing this issue, presents a unique phenomenon in international trade that demonstrates the world will not continue to tolerate these practices out of Korea and that they must change these practices," a Micron spokesman said. "It validates our view that illegal subsidies have occurred, over $16 billion in the past two years, and appropriate duties should be applied."

As the EU inched closer to its final decision, Hynix made accusations against both Infineon and Micron, speculating that they have influenced Taiwanese players into the action. Hynix also claimed that it has caused no injury to either of the companies and that by blocking its DRAM sales, Infineon and Micron are limiting PC manufacturers' supplier choices -- something that Hynix said would "upset" PC makers and add logistics issues. Hynix further said that when the final decisions come, it will be found not guilty, and that Infineon's and Micron's "appetite for market share has caused them injury and not Hynix."

Neither Infineon nor Micron would comment on the accusations directly.

"Considerable distortions in competition resulted mainly due to billion-dollar subsidies by the Korean government to the semiconductor manufacturer Hynix," a spokeswoman for Infineon said. "The dramatic price decay that took place in 2001 and 2002 cannot be explained by the market cycle, as alleged by the Koreans. Without the subsidization, Hynix would have had to exit the market, removing a substantial part of the overcapacity from the market. This normal market development was prevented by the measures of the Korean government."

Both companies stated that they welcomed the EU's preliminary decision.

"This is an important sign showing that the European Commission is willing to fight against unfair competition and violation of WTO [World Trade Organization] rules," Infineon's representative said. "We see this as a major milestone in our efforts for fair market conditions."

By: DocMemory
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