The Japanese government is to investigate allegations that South Korean memory maker Hynix received outlawed state aid.

"We believe that there is enough evidence for starting our investigation," Finance Minister Sadakazu Tanigaki told reporters at a regular news conference yesterday.

Hynix DRAM imported into the US and EU already incur levies of 34.8 per cent and 45 per cent after investigations in both territories concluded that rescue funding from Hynix's creditor banks amounted to state aid outlawed by the World Trade Organisation (WTO).

Elpida and NEC have made the same claims. Hynix dismisses the argument, stating that not only are some of its creditors incorporated outside South Korea, but that the South Korean government was in the process of ceding its control of other creditor banks at the time the rescue funding was offered.

Debt-laden Hynix recently began moves to convert debt to equity, backed by the proceeds of the sale of its non-memory chip business to Citicorp's venture capital division. Despite the EU and US tariffs, Hynix was able to become the world's second biggest memory seller in Q2. ®

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