*EPF508 11/22/2002
Commerce Launches Subsidy Case on DRAM Imports from South Korea
(Finds ferrovanadium from China, South Africa dumped in U.S. market) (400)

By Andrzej Zwaniecki
Washington File Staff Writer

Washington -- The Commerce Department has opened a subsidy investigation on computer memory chips imported from South Korea.

The department took action November 21 after a U.S. producer of dynamic random access memory (DRAM) semiconductors, Micron Technology Inc., filed a complaint asserting that South Korean DRAM manufacturers received loan subsidies and other government support worth thousands of millions of dollars, according to press reports.

The European Union started in July a similar investigation against Samsung Electronics Co. and Hynix Semiconductor Inc., the world's number one and number three chipmakers respectively, which are reportedly also subject to the U.S. investigation.

In 2001 South Korean producers generated $14,300 million in overseas sales of semiconductors, according to news reports.

However, the reports said, a sharp decline in semiconductor sales and DRAMs prices the same year hurt the manufacturers considerably and affected negatively the overall growth of the South Korean economy, which is heavily dependent on DRAMs exports.

The U.S. International Trade Commission (USITC) is expected to rule December 16 whether the DRAMs imports injured domestic manufacturers. The case will go forward only if the commission makes an affirmative preliminary determination.

Imposition of countervailing duties meant to offset subsidies requires final affirmative determinations from the Commerce Department that subsidies were provided and from USITC that the imports injured or threatened U.S. industry.

A subsidy is a grant conferred on a producer by a government.

In 2001 U.S. imports of DRAM products from South Korea amounted to more than $2,015 million.

In another case, Commerce made a final affirmative determination in the anti-dumping investigation on imports of ferrovanadium, a material added to steel to enhance strength and wear resistance, from China and South Africa.

In the ruling announced also November 21 the department said that the dumping margins ranged to 116 percent.

Imposition of antidumping duties requires final affirmative determination both from Commerce on dumping and from USITC on injury.

The final USITC ruling is expected by January 6, 2003.

Dumping is the sale of an export good at a price below the home-market or a third-country price, or below the cost of production. The dumping margin is the price difference expressed as a percentage of the export price.

The department calculated the final dumping margins as follows:

-- China: Pangang Group International & Trading Corp., 13.03 percent; all others, 66.71 percent.

-- South Africa, Highveld and all others, 116.00.

In 2001 the imports of ferrovanadium from China and South Africa amounted to $12.6 million.

(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

Return to Public File Main Page

Return to Public Table of Contents