Micron May File Charge On Dumping
By Jack Robertson
WASHINGTON -- Micron Technology Inc. has conferred with the U.S. government and the Semiconductor Industry Association (SIA) and is "very seriously considering" filing a DRAM dumping case against Korea,
Japan, or both, a company spokesman said last week.
The spokesman said further drastic price slashing of 4-Mbit and 16-Mbit DRAMs in the last month indicated that foreign suppliers had no intention of liquidating excess inventories in an orderly way.
When asked what countries Micron might identify in a dumping complaint, the spokesman replied, "We're keeping all our options open."
The SIA confirmed that Micron had talked with the association about a possible dumping action. "If Micron does file a dumping complaint, SIA will decide on its next course of action," the spokesman said. The SIA's board will meet on June 14, but until Micron takes action, there is no official agenda item on the matter.
The SIA remained neutral in Micron's last DRAM dumping case, which was filed against three Korean suppliers at the beginning of the decade. This time, however, the organization may have a vested interest in
Micron's dumping action; such a case could provide further ammunition in breaking a stalemate with Japan over extending the U.S.-Japan Semiconductor Trade Arrangement.
The SIA has told Congress that one major reason to extend the pact is to preserve chip dumping safeguards such as the "fast track" cost-calculation process-which may speed up any U.S. Commerce Department dumping investigation of Japanese firms. Micron's case against Japan would be the first test of the "fast track" process,
which will disappear if the chip treaty is not renewed.
An earlier DRAM dumping case against Japan, along with a separate EPROM dumping action, figured prominently in bringing about the initial U.S.-Japan chip agreement in 1986. Both cases ultimately were
suspended by the treaty. Because of such past history, some believe the SIA would welcome another dumping dispute as a way of pressuring Japan to talk about extending the chip accord.
Some sources charged that the Koreans, and perhaps the Japanese, are chopping DRAM prices in an attempt to drive out growing competition from Taiwan. Micron, however, has been caught in the crossfire.
The Micron spokesman said price slashing in the 1995 calendar fourth quarter cut Micron's second fiscal quarter earnings almost in half to 87 cents a share. Rumors of a possible Micron dumping action began to fly about this time, and DRAM prices reportedly began to level out. Some sources said the rumor alone may have helped Micron by causing an abatement of the price bloodletting.
Asked to comment, the Micron spokesman said, "I wouldn't argue with that."
However, the price free-fall picked up again in the first calendar quarter of 1996-dropping at least in half for both 4-Mbit and 16-Mbit DRAMs. Financial analysts have forecast that the latest flurry will show Micron's earnings cut in half again when the company releases its quarterly report.
The wide-open DRAM price conflagration is battering the Japanese and Korean suppliers as well-although as large, vertically integrated combines, these companies can withstand some prolonged financial damage.
Samsung last week said it is dropping its 1996 semiconductor sales forecast by 15%, to about $12.8 billion-a reflection of falling DRAM prices. And the Korean Ministry of International Trade and Industry brought that country's total semiconductor exports this year down 17%, to $25 billion.
Furthermore, the Japanese government has warned that the semiconductor price drop is so severe that lower overall sales could cause 1996 industrial output in that country to dip slightly.
The Japanese and Koreans are blaming each other for continuing the DRAM price slashing, and one executive even charged that Micron was guilty as well. In reality, all suppliers are trying to remain competitive in the free-fall-a situation reminiscent of the early 1980s when U.S. DRAM companies lost $2 billion and Japanese
companies as much as $6 billion in their attempts to match each other in the downward price spiral.
Ironically, at the very time DRAM dumping rhetoric is heating up in Washington, U.S. Commerce this month removed all dumping penalties levied on Hyundai and LG Electronics in a previous DRAM dumping case filed by Micron at the beginning of this decade. That case was based on the companies' DRAM prices in the '92-'94 time period, when the memory devices commanded a premium in a critically tight market. Samsung had been dropped earlier in the case.
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