The European Commission last week ruled that a provisional countervailing duty of 33% will be levied on imported DRAMs from Hynix Semiconductor Inc. as a penalty for what the commission said were illegal subsidies the chipmaker received from the Korean government.
No penalty was assessed against Samsung Electronics Co. Ltd., as alleged government subsidies to that company were considered to be below actionable levels.
The 33% DRAM duty against Hynix will be collected the next four months and adjusted after a final determination is made by the EC in August. The commission, the administrative arm of the European Union, ruled that two government-directed bailouts of Hynix in 2001 constituted illegal subsidies.
The EC said the Korean government set up a refinancing program using bonds "specific for Hynix, since it appeared to have been designed to help Hynix in its liquidity problems." A second bailout was financed by banks "influenced by the Korean government ... and not to have been granted under market conditions," the EC found.
Farhad Tabrizi, vice president of worldwide memory marketing at Hynix, said the company is convinced it will be exonerated when the EC makes its final ruling Aug. 25. He said that Infineon Technologies A.G., which filed the case against Hynix and Samsung with the EC last July, has not been injured since it has managed to gain DRAM market share over the last two years while Hynix has been losing share.
The duty levied against Hynix DRAM exports to Europe follows a 57.37% preliminary countervailing duty imposed by the U.S. Department of Commerce for what the agency said were similar illegal government subsidies to the Korean chipmaker.
Since Hynix has been blocked from shipping DRAMs to the United States, it has been serving its U.S. customers by drop-shipping parts to plants in Asia and supplying chips from its Oregon fab.
Tabrizi said the provisional EC countervailing duty against Hynix will hurt German PC and handset systems customers since the company is now blocked from shipping parts to Europe.
The Korean government earlier had asked the U.S. Commerce Department if Hynix can defer making escrow deposits to cover the duty levied against it April 1. Commerce will make a ruling June 12 on a final Hynix countervailing duty.
Hynix could also be slapped with punitive duties in Taiwan. A group of DRAM chipmakers in Taiwan earlier this month said it will petition the government to file a complaint against Hynix for allegedly unfair trade practices.