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Koreans hit back at allegations of dumping

Not using IMF money, trade association claims

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The Korean Semiconductor Industry Association (KSIA) has hit back at allegations by the CEO of Siemens that IMF funding and "suicidal pricing" was responsible for the decision to close a fabrication plant in Tyneside. In a letter in today's Financial Times, Hye-Bum Choi, director of the KSIA, said that the Korean semiconductor producers rejected "as totally ridiculous" the allegation. On August 2, Heinrich von Pierer, CEO of Siemens, blamed suicidal pricing as part of the reason for his decision to close the fab. Mr Hye-Bum, in his letter, said that Siemens could not ignore "an unequivocal and specific promise" the Korean government had made that IMF funds will be used to repay foreign debts and increase foreign currency reserves. Further, Mr Hye-Bum said that Siemens was unfairly blaming the Korean big three or the downcycle. "There is no reason to single out Korean producers for a worldwide phenomenon which concerns all producers," he said. "The Korean producers have taken drastic steps to reduce the overcapacity in the memory market by suspending investment plans." The day Siemens announced the closure, Peter Mandelson, the new head of the Department of Trade and Industry, contributed to the row by blaming Korean overproduction. But that conflicted with a double message as Derek Fatchett, from the Commonwealth & Foreign Office, promised the Koreans more investment. However, industry sources say that the European Union is continuing to take the allegations of dumping seriously. According to those sources, the EU will launch an investigation in September. ®

See related stories: Siemens blames IMF backed Koreans, Blair and Siemens get knickers in a twist, Big SK5 come under financial scrutiny, Memory prices fall in false dawn, Hyundai, Samsung, LG ready to swap businesses

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