[Federal Register Volume 63, Number 222 (Wednesday, November 18, 1998)]
[Notices]
[Pages 64040-64042]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-30855]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-583-832]
Initiation of Antidumping Duty Investigation: Dynamic Random
Access Memory Semiconductors From Taiwan
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Initiation of antidumping investigation.
EFFECTIVE DATE: November 18, 1998.
FOR FURTHER INFORMATION CONTACT: Alexander Amdur at (202) 482-5346,
John Conniff at (202) 482-1009 or Ron Trentham at (202) 482-6320,
Import Administration--Room B099, International Trade Administration,
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW,
Washington, DC 20230.
Initiation of Investigation
The Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (``the Act'') by
the Uruguay Round Agreements Act (``URAA''). In addition, unless
otherwise indicated, all citations to the Department's regulations are
references to the provisions codified at 19 CFR Part 351 (1998).
The Petition
On October 22, 1998, the Department of Commerce (``the
Department'') received a petition filed in proper form by Micron
Technology, Inc. (``petitioner''). The Department received supplemental
information to the petition on November 5, 1998. In accordance with
section 732(b) of the Act, petitioner alleges that imports of dynamic
random access memory semiconductors of one megabit and above
(``DRAMs'') from Taiwan are being, or are likely to be, sold in the
United States at less than fair value within the meaning of section 731
of the Act, and that such imports are materially injuring, or
threatening material injury to, an industry in the United States. The
Department finds that petitioner filed the petition on behalf of the
domestic industry because it is an interested party as defined in
section 771(9)(C) of the Act, and has demonstrated sufficient industry
support with respect to the antidumping investigation it is requesting
the Department to initiate. See Determination of Industry Support for
the Petition below.
Scope of Investigation
The products covered by this investigation are DRAMs from Taiwan,
whether assembled or unassembled. Assembled DRAMs include all package
types. Unassembled DRAMs include processed wafers, uncut die, and cut
die. Processed wafers fabricated in Taiwan, but packaged or assembled
into finished semiconductors in a third country are included in the
scope. Wafers fabricated in a third country and assembled or packaged
in Taiwan are not included in the scope.
The scope of this investigation includes memory modules. A memory
module is a collection of DRAMs, the sole function of which is memory.
Modules include single in-line processing modules (``SIPS''), single
in-line memory modules (``SIMMs''), dual in-line memory modules
(``DIMMs''), memory cards or other collections of DRAMs whether mounted
or unmounted on a circuit board. Modules that contain other parts that
are needed to support the function of memory are covered. Only those
modules that contain additional items that alter the function of the
module to something other than memory, such as video graphics adapter
(``VGA'') boards and cards, are not included in the scope. Modules
containing DRAMs made from wafers fabricated in Taiwan, but either
assembled or packaged into finished semiconductors in a third country,
are also included in the scope.
The scope includes, but is not limited to, video RAM (``VRAM''),
Windows RAM (``WRAM''), synchronous graphics RAM (``SGRAM''), as well
as various types of DRAM, including fast page-mode (``FPM''), extended
data-out (``EDO''), burst extended data-out (``BEDO''), synchronous
dynamic RAM (``SDRAM''), and ``Rambus'' DRAM (``RDRAM''). The scope of
this investigation also includes any future density, packaging or
assembling of DRAMs. The scope of this investigation does not include
DRAMs or memory modules that are reimported for repair or replacement.
The DRAMS subject to this investigation are currently classifiable
under subheadings 8542.13.80.05, 8542.13.80.24 through 8542.13.80.34 of
the Harmonized Tariff Schedule of the United States (``HTSUS''). Also
included in the scope are Taiwanese DRAM modules, described above,
entered into the United States under subheading and 8473.30.10.90 of
the HTSUS or possibly other HTSUS numbers. Although the HTSUS
subheadings are provided for convenience and customs purposes, the
written description of the scope of this investigation is dispositive.
As we discussed in the preamble to the Department's regulations (62
FR 27323), we are setting aside a period for parties to raise issues
regarding product coverage. The Department encourages all parties to
submit such comments by December 2, 1998. Comments should be addressed
to Import Administration's Central Records Unit at Room 1874, U.S.
Department of Commerce, Pennsylvania Avenue and 14th Street, NW,
Washington, DC, 20230. This period of scope consultation is intended to
provide the Department with ample opportunity to consider all comments
and to consult with parties prior to the issuance of the preliminary
determination.
Determination of Industry Support for the Petition
Section 732(b)(1) of the Act requires that petitions be filed on
behalf of a domestic industry. Section 732(c)(4)(A) of the Act provides
that a petition meets this requirement if the domestic producers or
workers who support the petition account for: (i) at least 25 percent
of the total production of the domestic like product; and (ii) more
than 50 percent of the production of the domestic like product produced
by that portion of the industry expressing support for, or opposition
to, the petition.
Section 771(4)(A) of the Act defines the ``industry'' as the
producers of a domestic like product. Thus, to determine whether the
petition has the requisite industry support, the Act directs the
Department to look to producers and workers who account for production
of the domestic like product. The International Trade Commission
(``ITC''), which is responsible for determining whether ``the domestic
industry'' has been injured, must also determine what constitutes a
domestic like product to define the industry. However, while both the
Department and the ITC must apply the same statutory definition of
domestic like product, they do so for different purposes and pursuant
to separate and distinct authority. In addition, the Department's
determination is subject to limitations of time and information.
[[Page 64041]]
Although this may result in different definitions of the domestic like
product, such differences do not render the decision of either agency
contrary to the law.1
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\1\ See Algoma Steel Corp., Ltd. v. United States, 688 F. Supp.
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays
and Display Glass Therefor from Japan: Final Determination;
Rescission of Investigation and Partial Dismissal of Petition, 56 FR
32376, 32380-81 (July 16, 1991).
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Section 771(10) of the Act defines the domestic like product as ``a
product which is like, or in the absence of like, most similar in
characteristics and uses with, the article subject to an investigation
under this title.'' Thus, the reference point from which the domestic
like product analysis begins is ``the article subject to an
investigation,'' i.e., the class or kind of merchandise to be
investigated, which normally will be the scope as defined in the
petition. As noted earlier, the scope of the petition is limited to
DRAMs of one megabit and above. This is petitioner's sole proposed
domestic like product. The Department has no basis on the record to
find this domestic like product definition clearly inadequate. The
Department has, therefore, adopted the domestic like product definition
set forth in the petition.
In this case, the Department determined that the petition and
supplemental information contained adequate evidence of sufficient
industry support; therefore, polling was not necessary. See Initiation
Checklist, dated November 12, 1998, (public document on file in the
Central Records Unit of the Department of Commerce, Room B-099).
Additionally, no person who would qualify as an interested party
pursuant to section 771(9)(A),(C), or (D) of the Act has expressed
opposition to this petition. Accordingly, the Department determines
that this petition is filed on behalf of the domestic industry within
the meaning of section 732(b)(1) of the Act.
Less Than Fair Value Allegation
Petitioner identified the following Taiwanese producers/exporters
in the petition: Mosel-Vitelic, Inc., Winbond Electronics, Acer
Semiconductor Manufacturing Inc., Powerchip Semiconductor Corp., United
Microelectronics Corporation, Taiwan Semiconductor Manufacturing
Corporation, Macronix International Co., Ltd., Alliance Semiconductor
Corporation, Etron Technology, Inc., Taiwan Memory Technology, Inc. and
G-Link Technology Corp. Petitioner further identified Vanguard
International Semiconductor Corporation (``Vanguard'') and Nan Ya
Technology Corporation (``Nan Ya'') as two major producers/exporters of
DRAMs from Taiwan. Petitioner based export price (``EP'') on price
quotes obtained by petitioner's sales personnel in the ordinary course
of business. These price quotes were for delivery of 4x4 16 Megabit EDO
DRAMs. Petitioner explained that it is Micron's practice to receive
verbal quotes without written documentation and supplied an affidavit
signed by a Micron sales representative attesting to the validity of
the price quotes. All U.S. market price quotes were denominated in
dollars and petitioner made no adjustments to these price quotes.
With respect to normal value (``NV'') petitioner used prices, based
on written price quotes for 4x4 16 megabit EDO DRAMs produced by
Vanguard and Nan Ya. The price quotes were obtained by a private market
research firm. Petitioner made no adjustment to these home market price
quotes.
Petitioner alleged that sales of the foreign like product were made
at prices below the cost of production within the meaning of section
773(b) of the Act and requested the Department to initiate a country-
wide sales below cost investigation. To support this claim, petitioner
compared the home market prices to each company's cost of production
(``COP''). Petitioner calculated the COP for Vanguard and Nan Ya based
on Micron's actual production experience with adjustments for known
differences in costs incurred in Taiwan and the United States.
Petitioner determined the die sizes, mask levels, metal levels, and
process technologies from examination of actual DRAM die from Vanguard
and Nan Ya. For the purposes of the petition, the processing yields
were assumed to be the same as those experienced by Micron. Petitioner
derived labor rates from the Bureau of Labor Statistics. Because the
most recent data available for Taiwan was from 1996, petitioner
adjusted the labor rates for the 1997 inflation rate.
Petitioner adjusted utility expenses using the ratio of U.S. energy
costs to Taiwanese energy costs, based on OECD energy price data. For
Vanguard, petitioner derived general and administrative (``G&A'')
expenses, interest expenses, and research and development (``R&D'')
expenses from the company's financial statements for the six months
ending June 30, 1998. See Exhibit 6 of the petition. Financial
statements for the 1997 fiscal year were not available so these
represent the most recent publicly available financial statements for
Vanguard.
Petitioner was unable to obtain financial statements for Nan Ya and
therefore based its G&A expenses and R&D expenses on Vanguard's
financial statements. Interest expenses were calculated using the 1997
consolidated financial statements of Nan Ya's parent company, Nan Ya
Plastics. See Exhibit 5 of the supplement to the petition.
Petitioner utilized Micron's intellectual property expenses, which
reflect royalties paid to other companies for use of their technology
in DRAM production. Again, petitioner believes that this estimate is
conservative since Micron maintains a larger patent portfolio than
either Vanguard or Nan Ya. By having a smaller patent portfolio,
Vanguard and Nan Ya need more licensing agreements for DRAMs
production.
Petitioner conservatively estimated a profit rate of zero for
constructed value. Because the home market prices of Vanguard and Nan
Ya were lower than the COP, normal value was based on CV for comparison
to the U.S. prices. Petitioner used exchange rates as published by the
Federal Reserve Bank of New York for currency conversions.
Based on comparisons of EP to NV, the petitioner estimated dumping
margins from 48 to 69 percent.
Initiation of Cost Investigations
Pursuant to section 773(b) of the Act, petitioners provided
information demonstrating reasonable grounds to believe or suspect that
sales in the home market of Taiwan were made at prices below the COP
and, accordingly, requested the Department to conduct a country-wide
sales-below-COP investigation in connection with the requested
antidumping investigation in Taiwan. The Statement of Administrative
Action (``SAA''), accompanying the URAA, H.R. Doc. No. 103-316, vol. 1
at 833 (1994), states that an allegation of sales below COP need not be
specific to individual exporters or producers. The SAA also states that
``Commerce will consider allegations of below-cost sales in the
aggregate for a foreign country, just as Commerce currently considers
allegations of sales at less than fair value on a country-wide basis
for purposes of initiating an antidumping investigation.'' Id.
Further, the SAA provides that ``new section 773(b)(2)(A) retains
the current requirement that Commerce have `reasonable grounds to
believe or suspect' that below-cost sales have occurred before
initiating such an investigation.'' Reasonable grounds will ``exist
when an interested party provides specific factual information on costs
and prices, observed or
[[Page 64042]]
constructed, indicating that sales in the foreign market in question
are at below-cost prices.'' Id. Based upon the comparison of the prices
from the petition for the representative foreign like products to its
adjusted costs of production, in accordance with section
773(b)(2)(A)(i) of the Act, we find the existence of ``reasonable
grounds to believe or suspect'' that sales of these foreign like
products in Taiwan were made below their respective COP's. Accordingly,
the Department is initiating the requested country-wide cost
investigation.
Initiation of Antidumping Investigation
We have examined the petition on DRAMs from Taiwan and have found
that it meets the requirements of section 732 of the Act, including the
requirements concerning allegations of the material injury or threat of
material injury to the domestic producers of a domestic like product by
reason of the complained-of imports, allegedly sold at less than fair
value. Therefore, we are initiating an antidumping duty investigation
to determine whether imports of DRAMs from Taiwan are being, or are
likely to be, sold in the United States at less than fair value. Unless
extended, we will make our preliminary determination by April 1, 1999.
Distribution of Copies of the Petition
In accordance with section 732(b)(3)(A) of the Act, a copy of the
public version of the petition has been provided to the representatives
of the authorities of Taiwan. We will attempt to provide a copy of the
public version of the petition to each exporter named in the petition
(as appropriate).
ITC Notification
We have notified the ITC of our initiation, as required by section
732(d) of the Act.
Preliminary Determination by the ITC
The ITC will determine by December 7, 1998, whether there is a
reasonable indication that imports of DRAMs from Taiwan are causing
material injury, or threatening to cause material injury, to a U.S.
industry. A negative ITC determination in the investigation will result
in this investigation being terminated; otherwise, the investigation
will proceed according to statutory and regulatory time limits.
This notice is published pursuant to section 771 (i) of the Act.
Dated: November 12, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-30855 Filed 11-17-98; 8:45 am]
BILLING CODE 3510-DS-P
