E8-17883. Intel Corporation, Fab 23, Colorado Springs, CO; Notice of Revised Determination on Remand

On June 6, 2008, the Department of Labor issued a Notice of Negative Determination on Remand pursuant to the March 24, 2008 order issued by the U.S. Court of International Trade (USCIT) in Former Employees of Intel Corporation v. U.S. Secretary of Labor, Court No. 07-00420. The Notice of determination was published in the Federal Register on June 16, 2008 (73 FR 34045).

On May 30, 2007, an official of Intel Corporation, Fab 23, Colorado Springs, Colorado (the subject firm) filed a petition for Trade Adjustment Assistance (TAA) and Alternative Trade Adjustment Assistance (ATAA) on behalf of workers and former workers of the subject firm. The official stated that the subject firm produced “WiFi products” for Intel Corporation (Intel) and communication microprocessors for a company that replaced purchases from the subject firm with imported products.

During the initial investigation, the subject firm official stated that the subject firm produced “silicon wafers” and that the worker separations were due to the subject firm's customer shifting to another company. AR 12. The company official further stated that the subject firm shifted silicon wafer production to Taiwan. AR 13.

The Department's Notice of negative determination, issued on June 15, 2007, stated that sales and production for silicon wafers increased in 2005, 2006, and year to date 2007, that the subject firm did not import silicon wafers, and that the subject firm did not shift production of silicon wafers to a foreign country during the relevant period. AR 23-25. The Department's Notice of determination was published in the Federal Register on June 28, 2007 (72 FR 35517). AR 26-30.

In a July 14, 2007 letter, a displaced worker requested administrative reconsideration. AR 39. The request alleged that the subject workers are de facto employees of another company (Marvel); the subject firm did not produce silicon wafers but “manufactures electronic circuits * * * on a silicon wafer”; subject firm production has been replaced with imports; the subject workers are eligible for TAA as secondarily-affected workers; and Marvel's shift of production to Taiwan is a basis for TAA certification of the subject workers. AR 40-43.

During the reconsideration investigation, the Department contacted the subject firm and received significant information about Intel's semiconductor chip production process. AR 57, 65, 66, 74, 101, 113.

During the reconsideration investigation, the Department confirmed that a company, Marvel, purchased from Intel the rights to the Hermon chip, and that, under the agreement, the subject firm would produce silicon wafers bearing the Hermon chip until Marvel's Taiwanese supplier was fully operational. The Department also confirmed that the subject firm ceased production in April 2007 and the last shipment of silicon wafers from the subject firm to Marvel was in the second quarter of 2007. AR 54-55. Further, the Department confirmed that the articles produced at the subject firm were silicon wafers bearing “WiFi semiconductor chips.” AR 57.

During the reconsideration investigation, the Department ascertained that the subject firm did not shift production to a country that is 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. AR 55, 56, 70, 101. The Department confirmed that the articles imported by Intel are not silicon wafers bearing semiconductor chips, dies, or packaged dies, but are WiFi cards. AR 101-102.

The negative determination on reconsideration, issued on September 26, 2007, stated that the subject firm produced silicon wafers and explained that the subject workers cannot be certified for TAA based on a shift of production to Taiwan absent evidence of increased imports (actual or likely) of like or directly competitive articles following the shift of production to another country. The determination also stated that the subject workers are not secondary workers because the subject firm neither supplied a component part to a buyer nor finished or assembled a final product for a buyer. AR 114-120. The Department's Notice determination was published in the Federal Register on October 3, 2007 (72 FR 56387). AR 121-123.

By letter to the USCIT, dated November 5, 2007, former workers of the subject firm requested judicial review.

On March 24, 2008, the USCIT granted the Department's request for voluntary remand, and directed the Department to determine whether, following the subject firm's shift of semiconductor wafer production to a foreign country, there were (actual or likely) increased imports of articles like or directly competitive with those produced by the subject firm.

Because the subject firm ceased production in April 2007, the Department determined, during the remand investigation, that the TAA criteria regarding significant worker separations and subject firm sales and/or production declines were met. Further, because the subject firm had shifted semiconductor wafer production to a foreign country, the Department determines that the TAA criterion regarding a shift of production was met.

Therefore, the focus of the remand investigation was limited to whether the subject worker group had satisfied either (1) the criterion that increased imports of articles like or directly competitive with semiconductor wafers produced by the subject workers contributed importantly to subject firm sales and/or production declines and worker separations, or (2) the criterion that the shift of semiconductor wafer production was to a qualified country and/or there were actual or likely increased imports of semiconductor wafers following the shift of production to a foreign country.

Based on information obtained in the remand investigation, the Department determined that the alleged imports are not like or directly competitive with the semiconductor wafers produced at the subject firm, and, as such, the subject workers cannot be adversely impacted by the increased imports by the subject firm. Further, based on the results of the customer survey conducted by the Department during the remand investigation, SAR 37-40, 51-53, the Department determined that the subject workers cannot be adversely impacted by increased imports by the subject firm's declining customer.

In the remand determination, the Department affirmed that the shift of semiconductor wafer production to Taiwan cannot be a basis for TAA certification for the subject worker group.

The Department also stated in the remand determination that because the subject workers are not certified eligible to apply for TAA, they cannot be certified eligible to apply for ATAA.

During the remand investigation, the Department searched the TAA database for certifications during the relevant time period of worker groups producing semiconductor wafers that were based on increased imports, and found only one case (Texas Instruments Inc., KFAB Manufacturing Division, Dallas, Texas; TA-W-62,197; issued November 8, 2007). Because only one case was found, the Department did not consider the certification to be relevant to the case at hand, much less indicative of likely increased aggregate imports of semiconductor wafers.

After the Department issued the negative determination on remand on June 6, 2008, however, the Department received information during the investigation of another matter remanded to the Department for further investigation, Former Employees of Fairchild Semiconductor Corporation v. United States Secretary of Labor, Court No. 06-00215 (FEO Fairchild) that caused the Department to reconsider the case at hand.

During the remand investigation of FEO Fairchild, the Department received information that Fairchild would begin importing semiconductor wafers in 2008. Upon receiving this information, the Department reviewed previously-submitted information in other cases to determine whether there were any indications that other domestic producers of semiconductor wafers did or would be importing semiconductor wafers in the time period consisting of May 2007 through the present.

The information that was the basis for the certification of Fairchild Semiconductor International, Mountain Top, Pennsylvania (TA-W-58,624; Notice of Revised Determination on Remand issued on July 22, 2008) combined with the information obtained from a careful review of previously-certified cases indicates the likelihood that there would be increased imports of semiconductor wafers in the time period after production shifted from Intel Corporation, Fab 23, Colorado Springs, Colorado to a foreign country.

In accordance with Section 246 the Trade Act of 1974 (26 U.S.C. 2813), as amended, the Department herein presents the results of its investigation regarding certification of eligibility to apply for ATAA. The Department has determined in this case that the group eligibility requirements of Section 246 have been met.

A significant number of workers at the firm are age 50 or over and possess skills that are not easily transferable. Competitive conditions within the industry are adverse.

Conclusion

After careful review of the facts obtained subsequent to the issuance of the negative remand determination, I determine that there was a total separation of a significant number or proportion of workers at the subject facility, and that there was a shift in production to a foreign country followed by likely increased imports of articles like or directly competitive with semiconductor wafers produced at the subject facility. In accordance with the provisions of the Act, I make the following certification:

“All workers of Intel Corporation, Fab 23, Colorado Springs, Colorado, who became totally or partially separated from employment on or after May 30, 2006, through two years from the issuance of this revised determination, are eligible to apply for Trade Adjustment Assistance under Section 223 of the Trade Act of 1974, and are eligible to apply for alternative trade adjustment assistance under Section 246 of the Trade Act of 1974.”

Signed at Washington, DC, this 25th day of July 2008.

Elliott S. Kushner,

Certifying Officer, Division of Trade Adjustment Assistance.