Thursday, July 24, 2003
The U.S. International Trade Commission on Wednesday (July 23) upheld a June ruling by the Commerce Department, finding that Hynix Semiconductor Inc. was responsible for causing injury to the U.S. DRAM industry when it accepted what Commerce found to be illegal government subsidies channeled to the company through several Korean banks.
The decision concludes the injury phase of the trade investigation and upholds the June ruling by Commerce, which imposed a 44.71 percent duty against all Hynix DRAM imported into the United States.
The tariff result from what Commerce said were illegal Korean government subsidies provided to the chip maker as part of three separate financial bailouts made through government-owned or -controlled domestic banks.
The complaint was filed last November by Micron Technology Inc. (Boise, Idaho), charging that the Korean government directed bailouts totaling $11.7 billion for the 18-month period from Jan. 1, 2001, through June 20, 2002. Micron later claimed that through the same banks the government engineered an additional $4 billion bailout for Hynix.
Since April, Hynix has been forced to post a bond or pay into an escrow account an amount equal to the duties following a preliminary ruling by Commerce., which was completed in June.
The ITC decision found that U.S. DRAM makers ¡ª namely Micron and the U.S. DRAM business of German chipmaker Infineon Technologies A.G. ¡ª were harmed by the Hynix bailouts.
Hynix said it has so far avoided the duty by shipping DRAMs to customers in the United States from its fab in Eugene, Ore., which is exempt from tariffs. Hynix said it has been able to sidestep the duty by arranging with U.S. customers to ship DRAMs to overseas plants using third-party carriers.
A Hynix executive said the company "is very disappointed by the [the ITC's] affirmative injury determination in the DRAMs case." He noted that it was difficult to comment on specifics of the ruling since the Commission's written rationale was not yet available. "Today we just learned the outcome, not the reasons why."
Once Hynix reviews the rationale over the next several weeks, two options are possible: appealing the ITC's decision to the Court of International Trade; having the South Korean government appeal the decision to the World Trade Organization; or both.
Hynix said it anticipated few changes to its DRAM operation despite the negative ruling. For example, it will increase DRAM production at its Oregon, fab, which is not subject to duties. "Therefore, our existing customers in the U.S. will not be affected at all by today's decision," the executive said.
By: DocMemory
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