The Department of Commerce yesterday issued a preliminary decision that concluded the Korean government, via government controlled banks, unfairly subsidized exports of DRAM between January 1, 2001 to June 30, 2002 by up to 57.37%. The investigation was prompted by complaints from US DRAM vendor Micron Technology Inc.
As a result, further DRAM imports into the US by Hynix could be subject to a 57.73% countervailing duty. The imposition of the duty is subject to a final decision by the Department of Commerce and the US International Trade Commission. In the meantime, Hynix will have to post a cash deposit or bond on future imports.
Hynix immediately protested against the ruling, while insisting it would not affect its US business.
Vice president Oh-chul Kwon described the preliminary ruling as Unjustified on both the facts and the law.
He insisted that the company had provided proof that the Korean government was not behind the restructuring of the company adopted by its creditors in 2001 and 2002. Rather, he continued, the evidence demonstrated that the bank restructurings that were the focus of the allegations in this case were wholly decided by Hynix’s creditors based on market principals.
Kwon pointed out that the decision was just a preliminary decision. He suggested that the Commerce department was overwhelmed with all the information and data that they received and needs more time to analyze it. He expressed his hope that once it has had more time to digest the information, the Commerce Department would change its position.
A spokesman for Hynix insisted the ruling would have little impact on its business in the US. He said the output of the company’s Fab in Eugene, Oregon would be unaffected by the ruling, and would be able be able to fulfill the majority of the demand from US customers. The company also said that sales to customers outside the US would be unaffected.
Micron said it was pleased with the ruling. The firm said in a statement that, This validates our view that illegal subsidies have occurred and that appropriate duties should be applied. We look forward to the process moving toward a final ruling by the Dept. of Commerce and the International Trade Commission.
The Department of Commerce ruling also covered DRAM imports by Samsung Electronics Co. However, the department found the subsidy rate on Samsung product was just 0.16%, and it does not appear that Samsung will be subject to any duties, because the amounts concerned are so small.
The Commerce Department will make its final ruling in June. The ITC will make its final decision 45 days after.
Source: Computerwire
