U.S. Imposes Stiff Penalties on Some Imported Chips

In a ruling that industry officials said marks the “beginning of the end of dumping,” the U.S. International Trade Commission on Tuesday said domestic makers of a particular kind of computer chip have been injured by unfairly priced imports.

The ruling, the final stage of a lengthy anti-dumping case, officially imposes stiff penalties of up to 35% of the price on 64K DRAM chips sold in the United States by Japanese companies that earlier were found guilty of dumping them--that is, selling the chips here at below cost or for less than in their home market.

Although most U.S. companies have abandoned the 64K DRAMs (dynamic random access memory) in favor of more sophisticated and more profitable semiconductors, the ruling is seen as an important victory for the U.S. industry.

Deterrent to Dumping

“What we’re looking for is a deterrent to dumping,” said Daryl Hatano, government affairs manager for the Semiconductor Industry Assn., a San Jose-based trade group. Hatano said the 64K case, combined with two other pending cases involving other types of chips, an unfair trade practices case, legislative attempts and international negotiations, will be a strong signal to the Japanese.

The ITC’s 4-2 decision Tuesday upholds its preliminary ruling last December and findings earlier this year by the Commerce Department that determined the margins by which the Japanese companies had been underselling the chips.

The government has been collecting penalties, based on those margins, from the companies since the Commerce ruling. The penalties are paid in the form of bonds, which by law will be returned to the Japanese companies if a later review shows that the dumping has been halted.

The following penalty margins were imposed: OKI Semiconductor, 35.3%; NEC Corp., 22.7%; Mitsubishi, 13.4%; Hitachi, 11.8%, and all others, 20.75%.

“This isn’t just to stop dumping in 64K DRAMs but in the entire U.S. semiconductor industry and to make sure it does not materialize” in other areas not yet jeopardized by cheap foreign-made products, Hatano said.

“The signs of a committed U.S. government and a committed U.S. industry will lead to the confidence U.S. companies need” to retain their current chip businesses and invest in future developments.

The Japanese makers now control the worldwide market in the 64K DRAMs.