US hits Hynix with 57% import duty

Response to illegal Korean gov't aid

Hynix will have to pay a 57.37 per cent surcharge on any memory chips it imports into the US, the US Commerce Department said yesterday.

The Commerce Department ruling follows an investigation into allegations that Hynix had received financial aid from the Korean government. Such assistance is illegal under World Trade Organisation rules.

The aid was provided by a number of Korean banks that have invested in Hynix. But since the Korean government holds significant stakes in many of those financial organisations, the help, intended to keep the troubled memory maker afloat, was tantamount to direct government aid.

So alleged Hynix rival Micron. The US Commerce Department clearly agrees.

Yesterday's announcement follows a similar ruling from the European Commission, which last month said it plans to impose duties of 30-35 per cent on Hynix DRAM imports. The Commission will meet later this month to determine the exact level of the tariff.

In the US, the effect of the duty may be minimal - Hynix owns and operates a DRAM plant in Oregon. It is producing 256Mb SDR and DDR SDRAMs at full capacity, the company said.

European customers probably won't be affected either - Hynix can simply ship orders to other parts of the world. Assembled goods containing Hynix parts are not subject to the levy.

The US Commerce Department also ruled that Samsung had also received some illegal government assistance, but set its duty at just 0.16 per cent, the minimum possible. As such, the ruling is effectively just an acknowledgement that Samsung may have received aid, but the Commerce Department can't legally do much about the matter if it did. The 0.16 per cent duty is likely to be waived. ®

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