The European Union has apparently made no decision yet regarding government subsidies to
Samsung Electronics Co. in a countervailing duty case filed against Korean DRAM
firms by Infineon Technologies AG.
It was erroneously reported earlier that the
EU had absolved Samsung of receiving alleged illegal Korean government
Warren Connelly, Samsung attorney, told a recent U.S. International Trade
Commission hearing that public documents at the EU showed Samsung had received
no subsidies. However, he did not state that the EU itself had made such a
The ITC and the U.S. Commerce Department have launched their own investigation
of Korean DRAM subsidies. Connelly urged the ITC and Commerce to drop Samsung
from the U.S. case. The EU subsidy investigation regarding Hynix still continues.
A complaint seeking countervailing duties for alleged illegal subsidies to Hynix
Semiconductor Inc. and Samsung Electronics Co. was filed at the ITC and Commerce
Department by Micron Technology Inc. early in November. Micron claimed that
$11.9 billion in improper government subsidies were given to Hynix alone in
2001. That petition parallels charges to the EU earlier this year against the
same companies by Infineon Technologies AG.
The European Union subsidy probe figured prominently in the ITC hearing.
An economist representing Micron warned the ITC that if Infineon prevailed and
the EU levied countervailing duties against the Korean DRAM makers, the
U.S. market could be severely impacted. Economist Bonnie Byers said, "If the
European Union places provisional countervailing duties on Korean DRAMs, it is
highly likely that this would increase their [DRAM] exports to the U.S."
She claimed that diverting Korean DRAMs from Europe to the U.S. could further
drive down already falling prices. That possibility could be seen in a positive
light by OEM and supply chain customers benefiting from the lower prices, though.
The ITC staff was concerned about the opposite scenario of potential DRAM
shortages in this country if U.S. countervailing duties were placed on the
Korean memory chips.
However, Micron Chairman and President Steve Appleton said his firm had unused
capacity it could quickly ramp up to offset any dropoff in Korean DRAM imports.
"Our fab in Manassas, VA. is only one-third utilized. We could quickly bring up
this fab" to full capacity, he said.
The Micron chief blamed the Virginia fab's under-utilization and the unequipped
fab shells at Lehi, Utah, on the severe Korean DRAM price cutting made possible
by the unfair government subsidies. "We chose not to bring on this capacity
because of the world market conditions," he added. " The Koreans continue to add
capacity in the worst period in the industry's history."