ITC finds evidence of Korean DRAM subsidies

Surprise, surprise

ComputerWire: IT Industry Intelligence

Micron Technology Inc won another victory in its efforts to prove that Korean DRAM vendors have received unfair support from their government when the US International Trade Commission delivered its preliminary ruling on the case last Friday.

In a statement, the ITC said it had determined that "there is a reasonable indication that a US industry is materially injured by reason of imports of DRAMs and DRAM modules from Korea that are allegedly subsidized."

Friday's decision follows the initiation of a countervailing duty investigation into DRAM imports by the US Department of Commerce last month. The ITC said that as a result of the decision, the DoC will continue to conduct its investigation, with a preliminary decision due around January 27, 2003.

The US government's scrutiny of the Korean DRAM industry was sparked by Boise, Idaho-based Micron, which filed a countervailing duty case with the DoC and ITC at the beginning of November.

A spokesman for Micron said the company was pleased with the progress of its claim so far. However, he said that the process was only two fifths completed. He said the next key stage was for the ITC to determine actual injury.

Once the US authorities decide how much damage the US DRAM industry sustained because of any subsidies by the Korean government, the US could impose anti-dumping tariffs on Korean DRAM imports. It could also impose countervailing duties to redress the injury suffered by the US DRAM industry. This would include Micron, as well as any other companies that produce DRAM in the US, for example Infineon.

Countervailing duties could take into account a number of different subsidies, the Micron spokesman said. For example, where Korean vendors had their debt wiped out by the government, countervailing duties could be set at the same level. Similarly, where companies received loans at below market interest rates, duties could be set that equated to the difference between the market rate, and the rate companies actually paid.