South Korea asks US to kill Hynix 57% import tariff

Offers limits on prices and size of DRAM exports

The South Korean government has sought the suspension of the punitive import tariffs the US Department of Commerce last week imposed on Hynix memory products.

Semiconductors are South Korea's biggest export, and the government doesn't want the duty to harm either sales or confidence in the country's exporters. Chips generated $16.6 billion in South Korean exports last year, of which 35 per cent was contributed by memory exports.

In return for waiving the 57 per cent import duty, the US will be offered a reduction in the number of chips shipped to the US and possibly the imposition of limits on the prices Hynix can charge.

If the punitive duty is approved, it could come into force in August. It would effectively block Hynix DRAM imports into the US. Hynix has said it will continue to produce memory for the US market at its North American plant in Oregon. That factory's output is not affected by the tariff.

The DoC has until 15 April to decide whether it wants to strike a deal with the South Koreans. If it does, the move is unlikely to please Micron, the US memory maker whose complaint to the DoC prompted the investigation that led to the imposition of the 57 per cent duty.

Micron's argument was that since Hynix had received significant rescue funds from creditor banks owned or part-owned by the South Korean government, that capital amounted to government aid banned by the World Trade Organisation.

In Europe, Infineon made a similar complaint, and the European Commission is currently pondering whether to levy import duties of 30-35 per cent on Hynix DRAM imports after it too ruled the memory maker had received illegal government aid.

Hynix has been wobbling on the brink of collapse for the last couple of years at least, and has repeatedly been pulled back from the edge by its creditor banks. ®

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