U.S. Says Korea Unfairly Subsidized Chips
Tue Apr 1, 4:42 PM ET Add Technology - Reuters to My Yahoo!
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By Elinor Mills Abreu
SAN FRANCISCO (Reuters) - The U.S. Department of Commerce, in a preliminary ruling on Tuesday, said it has found that Korea unfairly subsidized memory chips imported into the United States in 2001 and the first half of 2002.
If final U.S. government rulings reflect preliminary rulings, Korea's Hynix Semiconductor Inc. (00660.KS) could face punitive import duties of about 57 percent, according to a spokeswoman at the Commerce Department (news - web sites).
The Commerce Department preliminary ruling found that the subsidy rates for dynamic random access memory, or DRAM, chips used in computers ranged from 0.16 percent for Samsung Electronics Co. Ltd. (05930.KS) to 57.37 percent for Hynix.
Duties are not likely to be imposed on Samsung because the subsidy was found to be so small, the Commerce Department spokeswoman said.
The ruling follows a decision in December by the U.S. International Trade Commission that DRAM makers in the United States may be injured by Korean subsidies after the principal U.S. DRAM maker, Micron Technology Inc. (NYSE:MU - news), complained.
Samsung is No. 1 in global DRAM sales, while Micron is No. 2 and Hynix is No. 3.
A final ruling is expected from the Commerce Department on June 16 and the U.S. International Trade Commission on July 31, the Commerce Department said. An order imposing duties could be issued August 7 if the preliminary rulings are upheld.
The European Union (news - web sites) also launched a probe last July after Germany's Infineon Technologies AG (IFXGn.DE) complained. A preliminary EU decision is expected on April 24.
HYNIX SAYS RULING 'UNJUSTIFIED'
In its complaint, Micron has alleged that South Korea (news - web sites) provided about $11.8 billion in bailout packages and loan subsidies to its chipmakers between January 2001 and July 2002 in violation of U.S. Countervailing Duty Laws.
Hynix, which denies the allegations, has posted huge losses in the past three years and been kept afloat by a multibillion dollar bailouts from lenders including government-owned banks.
In a statement, Hynix called the ruling "unjustified on both the facts and the law."
Hynix "provided extensive proof that the Korean government was not behind the restructuring measures adopted by Hynix' creditors," said Oh-chul Kwon, Hynix vice president. The "bank restructurings that were the focus of the allegations in this case were wholly decided by Hynix' creditors based on market principles."
Boise, Idaho-based Micron praised the ruling in a statement saying it validated the company's view "that illegal subsidies have occurred and that appropriate duties should be applied."
As a result of the Commerce Department ruling, Hynix will be required to post bonds or cash deposits until final rulings are made, the agency spokeswoman said.
Since filing its complaint, Micron alleges South Korea has provided more than $3 billion in additional subsidies.
Micron has sued rivals from Japan, South Korea and Taiwan since the 1980s over alleged memory chip dumping, winning in several cases. This is the first time Micron has alleged illegal state subsidies.
Micron and Infineon filed their respective complaints after withdrawing from separate talks to take over Hynix assets. |
