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Hynix loses US 45% DRAM tax appeal

Intl. Trade Commission backs Dept. of Commerce

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The US Department of Commerce's decision to impose a 44.71 per cent import duty on Hynix DRAM products has been allowed to stand, the US International Trade Commission said yesterday.

The ruling follows an appeal launched by Hynix against the original DoC decision.

The DoC's move to impose the punitive tariff followed an investigation into claims from Hynix rival Micron that the South Korean chip maker had received government aid outlawed by the World Trade Organisation.

Hynix denies the claim, stating that just because some of the creditor banks that bailed the company out financially were part-owned by the South Korean government, the rescue plan was not tantamount to illegal government aid.

In its appeal to the ITC, it also argued that the rescue package had not harmed the US DRAM industry. Unfortunately, the ITC disagrees with Hynix, and so the 44.71 tariff will be applied as planned.

Hynix has been paying the tariff since April, putting the money into a special escrow account just in case its attempts to overturn the DoC ruling went against it. The DoC found the company guilty of accepting illegal aid in April, but didn't set the level of the duty to be imposed until June.

That said, Hynix won't have paid much into the account simply because it is satisfying much of the US demand for its DRAM products from its Eugene, Oregon memory fab. Output from that plant aren't imports so are free from the tariff. What memory produced overseas that it does provide for US companies has also avoided the duty by being shipped to customers' own foreign facilities.

Hynix can still appeal further, to the Court of International Trade. The South Korean Government is already appealing to the WTO itself on Hynix's behalf. Given how little trouble the duty appears to be causing it, Hynix could well leave the matter alone. However, it may feel the need to save face through vindication in these higher courts. ®

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