LONDON The European Commission appears set to impose import duties of up to 35 percent on DRAMs from troubled Hynix Semiconductor, the world's third largest DRAM maker, according to a Financial Times report.
European authorities have ruled that Hynix has been receiving illegal state aid, the report said. Debt-ridden Hynix has been subject to repeated bail-out plans from its creditors, which include South Korean state-run banks.
The import duty proposal follows an eight-month investigation into Hynix's finances and is now expected to be approved by mid-April, the report said. This would effectively exclude Hynix from the European market because of the disadvantage the company would incur when trying to sell DRAMs in competition with rival DRAM vendors such as fellow Korean company Samsung Electronic Co. Ltd., European DRAM-maker Infineon Technologies AG and U.S. maker Micron Technologies Inc.
The case against Hynix was originally brought before the European authorities by Infineon, paralleling a move by Micron to get Hynix imports into the United States examined by the U.S. International Trade Commission (see November 22, 2002, story).
Both Hynix and the South Korean government have denied the charges of illegal subsidy, claiming that lending decisions were made on a commercial basis, the FT report said.
European purchases of DRAMs are relatively slight since only a small percentage of the world's computers are manufactured in Europe. However, if the U.S. should reach the same conclusion as the European Union authorities Hynix may be forced to declare itself bankrupt and be broken up.
The proposed duty measures were presented to a meeting of European Union member states in Brussels yesterday (March 20, 2003) and would take effect from April 25, the report said.