S. Korea condemns U.S. punitive duties on Hynix<\/p>\n
Park Chan-Kyong, Agence France Presse, Seoul<\/p>\n
South Korea on Wednesday condemned a U.S. decision to impose
\npunitive duties on ailing computer chipmaker Hynix Semiconductor,
\nthreatening action at the World Trade Organization (WTO).<\/p>\n
The Ministry of Foreign Affairs and Trade said it \"deeply
\nregretted\" the U.S. Commerce Department's preliminary decision to
\nimpose crippling duties on Hynix on charges the South Korean
\ncompany had received government subsidies.<\/p>\n
The U.S. Department of Commerce said dynamic random access
\nmemory (DRAM) chips from South Korea were unfairly subsidized and
\ncountervailing duties would be imposed on chips shipped by Hynix
\nand Samsung Electronics.<\/p>\n
Hynix faces a similar probe in Europe, where the European
\nCommission (EC) called for import duties of 30-35 percent on
\nHynix's shipments to the European Union (EU) and a preliminary
\nruling is due late this month.<\/p>\n
Hynix was hit with a massive 57.37 percent punitive tariff,
\nmuch steeper than the widely expected 30 percent, with Samsung
\nfacing only a 0.16 percent tariff.<\/p>\n
The U.S. Commerce Department initiated an investigation into
\nHynix Semiconductor and Samsung Electronics in November following
\na petition by Micron Technology to determine if the South Korean
\ngovernment had extended subsidies to local DRAM makers.<\/p>\n
\"We express regret that the U.S. government accepted
\nunilateral allegations by the accuser and decided to impose high
\ncountervailing duties of 57.37 percent\" on Hynix, the ministry
\nsaid.<\/p>\n
It said the bailout package extended by local banks to Hynix
\nwas purely a private decision and could not be viewed as a form
\nof government subsidy simply because some banks involved were
\nstate-controlled.<\/p>\n
Under the preliminary ruling, Hynix must deposit temporary
\nduties worth US$25 million every month for its U.S. shipments of
\nDRAM chips pending a final ruling which will come in July.<\/p>\n
South Korea's Ministry of Commerce, Industry and Energy
\ninsisted the government had taken no part in the bailout
\nprogram which was decided upon by Hynix creditor banks.<\/p>\n
\"We will do our best to have the final ruling reflect our
\nposition. Should these efforts fail, we would also study various
\ncountermeasures including legal action at the WTO,\" assistant
\nminister Kim Jong-Kap told AFP.<\/p>\n
Hynix also expressed shock and dismay at the U.S. decision,
\nwhich it said was illegimate and based on wrong information.<\/p>\n
The company plans to increase production at its U.S.
\nsubsidiary in Eugene, Oregon and expand exports to Asia and other
\nregions.<\/p>\n
Last year, DRAM chips made up 35 percent, or $5.97 billion, of
\nSouth Korea's total semiconductor exports, of which 32 percent or
\n$1.94 billion were shipped to the U.S.<\/p>\n
Hynix has racked up net losses of 9.5 trillion won ($7.5
\nbillion) over the past three years, including 1.95 trillion won
\nof loss last year.<\/p>\n
Kyobo Securities industry analyst Kim Young-Jun said the U.S.
\nruling may lead to a fall in DRAM chip spot prices in the short
\nterm.<\/p>\n
He said the U.S. market takes up about a quarter of Hynix
\nsales with only half affected by the countervailing duty, as it
\nproduces some of the chips in Eugene, Oregon.<\/p>\n
\"Samsung Electronics and Micron Technology may enjoy higher
\nmarket share but they have to endure additional price falls,\" he
\nsaid, noting April and May are typically the low season for
\nchips.<\/p>\n
The prospective chip price declines will facilitate industry
\nconsolidation by weeding out the weaker players, from which
\nmajors like Samsung should benefit in the long run, he said.<\/p>",
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