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October 23, 2005 3:19 pm

Hynix protests at Japan’s D-Ram tariff plan

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Hynix Semiconductor, of South Korea, strongly protested against Japan’s plans to impose a 27.2 per cent duty on its D-Ram chips, calling the move “disappointing and inappropriate”.

The world’s second-largest memory chipmaker said it would “actively counter” the move – which would mark the first time Tokyo levied a countervailing duty – along with the South Korean government, after Tokyo notified Seoul’s trade ministry of its plan late last week.

The Japanese government is expected to make a final ruling before next February.

Since June 2004, Japan has been investigating allegations that Hynix received illegal subsidies from Seoul, after complaints from Elpida and Micron Japan. The chipmakers called on Tokyo to impose punitive tariffs on D-Rams made by Hynix, claiming the imports were hurting the Japanese industry.

“The decision is unfair because it is difficult to conclude that Hynix’s D-Ram chips damaged Japanese firms, given the current market conditions,” the Korean chipmaker said. “And the claims Hynix received state subsidies are not backed by clear legal evidence.”

In 2003, the US slapped a 44.29 per cent import tariff on Hynix, effective for five years, after taking issue with huge loans Hynix received from state-backed banks in 2001/02. Shortly afterwards, the EU also imposed a 34.8 per cent import duty.   

Hynix said it would minimise the negative impact the duty would have on its exports to Japan by using overseas plants and increasing sales of non-D-Ram chips.

Seoul and Hynix will be given an opportunity to make a counter statement by November 21 and they are expected to hold talks with Tokyo before December 9. “We will make a strong complaint to Tokyo so it can make a rational final ruling,” Hynix said.

Hynix exported $1.4bn worth of chips to Japan last year, up 47 per cent from a year ago. But its exports dropped about 30 per cent in the first nine months of this year. It had a 15.9 per cent share of Japan’s D-Ram market, behind Samsung’s 38.3 per cent and Elpida’s 18.6 per cent but ahead of Micron’s 10.5 per cent. 

Hynix has made a strong comeback through tough restructuring after being kept afloat by multibillion-dollar bail-outs from creditors. The chipmaker got back on its own feet in July after repaying debts to creditors.

Creditors are set to offload a 23.4 per cent stake in Hynix by November to recoup part of their investments.

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