E7-19481. Intel Corporation, Fab 23, Colorado Springs, Colorado; Notice of Negative Determination on Reconsideration

On August 22, 2007, the Department issued an Affirmative Determination Regarding Application for Reconsideration applicable to workers and former workers of Intel Corporation, Fab 23, Colorado Springs, Colorado (the subject firm). The Department's Notice of affirmative determination was published in the Federal Register on August 29, 2007 (72 FR 49736). The subject workers produce silicon wafers.

The negative determination was based on the Department's findings that, during the relevant period, the subject firm's sales and production of silicon wafers increased, and the subject firm did not import or shift production of silicon wafers abroad. The Department's Notice of negative determination regarding the subject workers' eligibility to apply for Trade Adjustment Assistance (TAA) and Alternative Trade Adjustment Assistance (ATAA) was issued on June 15, 2007, and published in the Federal Register on June 28, 2007 (72 FR 35517).

The request for reconsideration makes three allegations.

First, the petitioner alleges that the Department misidentified the article produced at the subject firm (“Intel Fab23 does NOT manufacture Silicon Wafers, FAB23 manufactures electronic circuits called dies on a silicon wafer. These dies are cut from the wafer and then packaged. At this time, the packaged dies are called `chips' and sold. It should be noted, the manufactured wafer can be sold and the `test and assembly' of the chip can take place elsewhere. There are three steps here, a) INTEL buys the bare silicon wafer from a supplier, b) Fab23 then manufactures the electronic circuit on the wafer called a die and c) then die is tested and assembly.”) A corollary to this allegation is that the Department should have conducted a TAA investigation with a focus on chips instead of wafers.

Second, the petitioner alleges that the subject workers are eligible to apply for TAA due to a shift of production to Taiwan. The petitioner states that, in 2006, Intel Corporation (Intel) sold the “Hermon” line of chips to another company and that the subject firm agreed to produce “Hermon” chips for the buyer until the buyer's Taiwan facility could produce the “Hermon” chips. The petition asserts that because the subject firm is an “Agent Manufacturer” of the buyer, the buyer's decision to use Taiwanese chips should be construed as a shift of production from the subject firm to Taiwan.

Third, the petitioner alleges that the subject workers are eligible to apply for TAA as secondary workers. The petitioner stated, in part, that “Manufacturing Technicians of INTEL Fab 23 are likely secondary/down stream Employees” and that eligible secondary workers “include workers employed by supplier firms, downstream producers, and firms that provide contract services who are separated or threatened with separation if their separation is their separation is due to a loss of business with a firm where workers have been certified as eligible to apply for trade adjustment assistance.”

In order to determine whether the initial investigation focused on the wrong article, the Department carefully reviewed previously-submitted information, all the information provided in the request for reconsideration, new information provided by the subject firm, and information available in the public domain (such as the Internet).

The chip production process consists of three basic steps: first, prepare (purify and polish) a raw silicon wafer; second, process the wafer (add and expose layers of chemicals and circuitry onto the wafer) until engineered patterns of electrical passages (also called integrated circuits or chips) in the desired quantity are created; third, cut the circuit-laden wafer into individual dies and packaged (also called unit packaging).

Steps one and two are known as wafer fabrication. After wafer fabrication is complete, a quality control measure called a wafer sort may take place. Each wafer may carry hundreds or thousands of (usually) identical circuits, depending on the size of the circuitry and the diameter of the wafer.

According to the request for reconsideration, the article that exists at the end of step two is a manufactured wafer. According to the subject firm, the article that exists at the end of step two is a fabricated wafer.

At step three (also known as unit packaging), the fabricated wafer is cut into dies and processed into packaged chips (also called fabricated chips). After the wafer is cut into dies, each chip-bearing die is mounted on a small printed circuit board which will allow it to connect with other devices through solder ball connections. The chip/circuit-board unit is then coated with epoxy plastic, leaving only the solder balls exposed. While the final package (also called a finished semiconductor chip) can be sold “as is,” it is usually connected to other circuit boards so it can be connected to a wide variety of electronic devices (such as cell phones and personal digital assistants).

According to subject firm, the subject facility was engaged in only steps one and two, and step three took place outside the United States. According to the request for reconsideration, “dies are cut from the wafer and then packaged * * * It should be noted, the manufactured wafer can be sold and the `test and assembly' of the chip can take place elsewhere.”

Because the reconsideration investigation revealed that only wafer fabrication took place at the subject firm, the Department determines that the subject firm produced silicon wafers and that the focus of the initial TAA investigation was proper.

Under section 113 of the Trade Adjustment Assistance Reform Act of 2002, workers may be eligible to apply for TAA if they were laid-off if their company shifted production abroad to a country that is either a party to a free trade agreement with the United States or named as a beneficiary under the Andean Trade Preferences Act, the African Growth and Opportunity Act or the Caribbean Basin Economic Recovery Act.

Because Taiwan is not a country that is a party to a free trade agreement with the United States or named as a beneficiary under any of the aforementioned acts, the subject workers cannot be certified for TAA based on a shift of production abroad. Further, the subject workers cannot be certified as eligible to apply for TAA because the articles that are being imported following the shift of production to Taiwan are not like or directly competitive with the silicon wafers produced at the subject firm.

In order to make an affirmative determination that the subject workers qualify as secondary workers, the following group eligibility requirements under section 222(b) must be met:

(1) A significant number or proportion of the workers in the workers' firm or an appropriate subdivision of the firm have become totally or partially separated, or are threatened to become totally or partially separated; and

(2) The workers' firm (or subdivision) is a supplier or downstream producer to a firm (or subdivision) that employed a group of workers who received a certification of eligibility to apply for trade adjustment assistance benefits and such supply or production is related to the article that was the basis for such certification; and

(3) either—

(A) The workers' firm is a supplier and the component parts it supplied for the firm (or subdivision) described in paragraph (2) accounted for at least 20 percent of the production or sales of the workers' firm; or

(B) a loss of business by the workers' firm with the firm (or subdivision) described in paragraph (2) contributed importantly to the workers' separation or threat of separation.

The subject workers are not considered secondary workers because the subject firm neither supplied a component part to the buyer nor finished or assembled a final product for the buyer. Further, the buyer of the “Hermon” line of chips is not a company that employs a group of workers who received a certification of eligibility to apply for TAA benefits.

In order for the Department to issue a certification of eligibility to apply for ATAA, the subject worker group must be certified eligible to apply for TAA. Since the subject workers are denied eligibility to apply for TAA, the workers cannot be certified eligible for ATAA.

Conclusion

After careful reconsideration, I affirm the original notice of negative determination of eligibility to apply for worker adjustment assistance for workers and former workers of Intel Corporation, Fab 23, Colorado Springs, Colorado.

Signed at Washington, DC, this 26th day of September 2007

Elliott S. Kushner,

Certifying Officer, Division of Trade Adjustment Assistance.