Semiconductor ‘Dumping’ to Be Investigated

The United States told Japan on Tuesday that it will investigate alleged “dumping” of Japanese semiconductors on the U.S. market, a U.S. Embassy official said.

The official said that acting U.S. Special Trade Representative Michael Smith will review the claim of U.S. semiconductor makers that their Japanese counterparts have priced exports to the United States below production costs.

Under U.S. law, such action would be an unfair trading practice that could result in retaliatory action against Japanese products.

In talks about Japan’s barriers to imports of electronic products, Smith handed Japanese officials a petition filed by U.S. semiconductor makers Friday urging the Reagan Administration to force Japan to break up an alleged cartel of Japanese semiconductor makers and further open its market to overseas computer chips, the embassy official said.

Scrapping of Benefits

If the Administration finds the claims are true, President Reagan could take such steps as scrapping some trade benefits accorded Japan or taking antitrust measures against the U.S. subsidiaries of the companies.

U.S. trade officials “expected more of a fight from the Japanese but they didn’t seem to have their figures ready at the meeting” and commented very little on the allegations, said the embassy official, who agreed to discuss the meeting on condition he not be quoted by name. He said officials of Japan’s Ministry of International Trade and Industry balked when Smith proposed that the two sides form a committee to study dumping and U.S. antitrust laws that could help the ministry in its guidance of Japanese chip makers and other industries.

American semiconductor makers also said in their petition that despite increasing their investment in Japanese plants and sales, the market share of U.S. companies in Japan has remained at roughly 11% since 1973 because the six major Japanese semiconductor makers block the growth of U.S. supplies.

An official at the trade ministry said U.S. companies are as free as Japanese companies to sell semiconductors in Japan’s $7-billion market, noting that Japan, like the United States, has lowered tariffs on the computer chips and freed foreign investment.