Complaint Filed Against Korean DRAM Makers

Unhappy with what it calls “special” treatment Micron Technology Friday filed a complaint against DRAM semiconductor products manufactured in South Korea.

The U.S. Department of Commerce and the International Trade Commission received the countervailing duty (CVD) case with intent of investigating the claims made by the Boise, Idaho-based company.

The complaint does not identify specific companies by name, but Hynix Semiconductor and Samsung Electronic are two of the largest DRAM makers in the area.

Micron claims multi-billion-dollar bailout packages and loan subsidies to South Korean semiconductor companies are in violation of U.S. Countervailing Duty laws and South Korea’s commitments under World Trade Organization agreements. The company said the subsidies have included loan write-offs, debt-for-equity swaps, government-induced debt financings and re-financings on noncommercial terms, special export financing and special tax treatment.

“The ongoing subsidization of Korean DRAM manufacturers violates free market principles and has resulted in excess supply in the international market for DRAM products,” Micron CEO and President Steve Appleton issued in a statement. “Inefficient manufacturing operations should not be allowed to escape normal market forces. Korea has not kept its commitments to the World Trade Organization and continues to violate U.S. Countervailing Duty laws.”

Hoping to ease tensions and prevent a trade war, South Korea’s ministry Saturday said it would fight an application for trade penalties by U.S. computer-chip maker.

“The South Korean government is working on countermeasures because Micron’s claims could emerge as a negative factor for Hynix’s revival plans,” the ministry told Reuters.

Hynix, which was rescued twice in 2001 by creditors who are currently owed more than $5 billion, denied Micron’s allegations of subsidies.

“The debt-rescheduling plans for Hynix were decided by creditors according to market principles,” Hynix said in a statement. “Micron’s claim of the government subsidies is totally invalid.”

The company also pointed to subsidies that Micron itself had received from the governments of Italy and Singapore when it expanded plants in those countries.