[Federal Register Volume 60, Number 175 (Monday, September 11, 1995)]
[Notices]
[Pages 47149-47152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22501]



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DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-812]


Dynamic Random Access Memory Semiconductors of One Megabit or 
Above From the Republic of Korea; Preliminary Results of Antidumping 
Duty Administrative Review

AGENCY: Import Administration/International Trade Administration/
Department of Commerce.

ACTION: Notice of Preliminary Results of Antidumping Duty 
Administrative Review.

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SUMMARY: In response to requests from three respondents, one U.S. 
producer, and several interested parties, the Department of Commerce 
(the Department) has conducted an administrative review of the 
antidumping duty order on dynamic random access memory semiconductors 
of one megabit or above from the Republic of Korea. The review covers 
three manufacturers/exporters of the subject merchandise to the United 
States for the period of October 29, 1992 through April 30, 1994
    We have preliminarily determined that sales have been made below 
the foreign market value (FMV). If these preliminary results are 
adopted in our final results of administrative review, we will instruct 
U.S. Customs to assess antidumping duties equal to the difference 
between the United States price (USP) and the FMV. Interested parties 
are invited to comment on these preliminary results. Parties who submit 
arguments in this proceeding are requested to submit with the argument 
(1) a statement of the issue, and (2) a brief summary of the argument.


[[Page 47150]]

EFFECTIVE DATE: September 11, 1995.

FOR FURTHER INFORMATION CONTACT: Thomas F. Futtner, Office of 
Antidumping Compliance, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230, telephone: (202) 482-
3814.

SUPPLEMENTARY INFORMATION:

Background

    On May 10, 1993, the Department of Commerce published in the 
Federal Register (58 FR 27520) the antidumping duty order on dynamic 
random access memory semiconductors (DRAMS) from the Republic of Korea. 
On May 4, 1994, the Department published (59 FR 23051) a notice of 
``Opportunity to Request an Administrative Review'' of this antidumping 
duty order for the period of October 29, 1992, through April 30, 1994. 
We received timely requests for review from Hyundai Electronics 
Industries, Co. (Hyundai), Goldstar Electron Co. (Goldstar), and 
Samsung Electronics Co. (Samsung). The petitioner, Micron Technologies 
Inc., requested an administrative review of these same three Korean 
manufacturers of DRAMs. Two interested parties, PNY Electronics and 
Pulsar Components International, Inc., requested a review of sixteen 
Japanese resellers of Korean DRAMs. However, these two interested 
parties subsequently withdrew their request. On June 15, 1994, the 
Department initiated a review of the above Korean manufacturers (59 FR 
30770). The period of review (POR) for all respondents was October 29, 
1992, through April 30, 1994.
    The Department is conducting this administrative review in 
accordance with section 751(a) of the Tariff Act of 1930, as amended 
(the Act). Unless otherwise indicated, all citations to the statute and 
to the Department's regulations are in reference to the provisions as 
they existed on December 31, 1994.

Scope of the Review

    Imports covered by the review are shipments of DRAMs of one megabit 
and above from the Republic of Korea (Korea). For purposes of this 
review, DRAMs are all one megabit and above DRAMs, whether assembled or 
unassembled. Assembled DRAMs include all package types. Unassembled 
DRAMs include processed wafers, uncut die and cut die. Processed wafers 
produced in Korea, but packaged, or assembled into memory modules in a 
third country, are included in the scope; wafers produced in a third 
country and assembled or packaged in Korea are not included in the 
scope.
    The scope of this review 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), or other collections of DRAMs, whether unmounted or 
mounted on a circuit board. Modules that contain other parts that are 
needed to support the function of memory are covered. Only those 
modules which contain additional items which 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.
    The scope of this review also includes video random access memory 
semiconductors (VRAMs), as well as any future packaging and assembling 
of DRAMs.
    The scope of this review also includes removable memory modules 
placed on motherboards, with or without a central processing unit 
(CPU), unless the importer of motherboards certifies with the Customs 
Service that neither it, nor a party related to it or under contract to 
it, will remove the modules from the motherboards after importation. 
The scope of this review does not include DRAMs or memory modules that 
are reimported for repair or replacement.
    The DRAMs subject to this review are classifiable under subheadings 
8542.11.0001, 8542.11.0024, 8542.11.0026, and 8542.11.0034 of the 
Harmonized Tariff Schedule of the United States (HTSUS). Also included 
in the scope are those removable Korean DRAMs contained on or within 
products classifiable under subheadings 8471.91.0000 and 8473.30.4000 
of the HTSUS. Although the HTSUS subheadings are provided for 
convenience and customs purposes, the written description of the scope 
of this review remains dispositive.

United States Price

    In calculating USP, the Department treated respondents' sales as 
purchase price, as defined in section 772(b) of the Act, when the 
merchandise was sold to unrelated U.S. purchasers prior to importation. 
The Department treated respondents' sales as exporter's sale price 
(ESP), as defined in section 772(c) of the Act, when the merchandise 
was sold to unrelated U.S. purchasers after importation.
    We calculated purchase price based on packed, f.o.b., f.c.a., or 
c.i.f. prices to unrelated customers in the United States. We made 
deductions, where appropriate, for foreign brokerage and handling, 
foreign inland insurance, air freight, air insurance, U.S. duties, U.S. 
commissions, discounts, and rebates in accordance with section 
772(d)(2) of the Act.
    We calculated ESP based on packed, ex-U.S. warehouse prices to 
unrelated customers in the United States. We made deductions, where 
appropriate, for discounts, rebates, foreign brokerage and handling, 
foreign inland insurance, air freight, air insurance, U.S. duties, 
credit expenses, warranty expenses, royalty payments, U.S. commissions, 
advertising and promotion expenses, foreign banking charges, U.S. 
subsidiary packing expenses and U.S. and Korean indirect selling 
expenses, including inventory carrying costs in accordance with section 
772(d)(2) of the Act. For both purchase price and ESP sales, we added 
duty drawback, where applicable, pursuant to section 772(d)(1)(B) of 
the Act.
    We adjusted USP for taxes in accordance with our practice as 
outlined in Siliconmanganese from Venezuela, Preliminary Determination 
of Sales at Less-Than-Fair-Value (LTFV), 59 FR 31204 (June 17, 1994). 
For DRAMs that were further manufactured into memory modules after 
importation, we deducted all value added in the United States, pursuant 
to section 772(e)(3) of the Act. The value added consists of the costs 
of the materials, fabrication, and general expenses associated with the 
portion of the merchandise further manufactured in the United States, 
as well as a proportional amount of profit or loss attributable to the 
value added. See, e.g., Notice of Final Determination of Sales at LTFV; 
Certain Hot-Rolled Carbon Steel Flat Product, Certain Cold-Rolled 
Carbon Steel Flat Product, Certain Corrosion-Resistant Carbon Steel 
Flat Products and Certain Cut-to-Length Carbon Steel Plate from France, 
58 FR 37125 (July 9, 1993). Profit or loss was calculated by deducting 
from the sales price of the memory module all production and selling 
costs incurred by the company for the memory module. The total profit 
or loss was then allocated proportionately to all components of cost. 
Only the profit or loss attributable to the valued added was deducted. 
In determining the costs incurred to produce the memory module, we 
included materials, fabrication, and general expenses, including 
selling expenses and interest expenses. No other adjustments were 
claimed or allowed.

Foreign Market Value

    In order to determine whether there were sufficient sales of DRAMs 
in the 

[[Page 47151]]
home market to serve as a viable basis for calculating FMV, we compared 
the volume of home market sales of DRAMs to the volume of third country 
sales of DRAMs, in accordance with section 773(a)(1) of the Act. All 
three respondents had viable home markets with respect to sales of 
DRAMs made during the POR in accordance with 19 CFR 353.48(a). The 
Department relied on monthly weighted-average home market prices in the 
calculation of FMV.
    Because Goldstar made some home market sales to related parties 
during the POR, we tested these sales to ensure that, on average, the 
related party sales were at arms length. To conduct this test, we 
compared the gross unit prices of sales to related and unrelated 
customers net of all movement charges, direct and indirect selling 
expenses, valued-added tax and packing. See Final Determination of 
Sales at LTFV; Certain Cold-Rolled Carbon Steel Flat Products from 
Argentina, Appendix II, 58 FR 87062 (July 9, 1993). Based on the 
results of that test, we discarded from Goldstar's home market database 
all related party sales not made at arm's length. See Notice of Final 
Determination of Sales at LTFV; Small Diameter Circular Seamless Carbon 
and Alloy Steel, Standard, Line and Pressure Pipe from Brazil, 60 FR 
31960, 31971 (June 19, 1995).
    Because the Department found sales made at prices less than the 
cost of production (COP) during the less than fair value (LTFV) 
investigation, in accordance with our standard practice, we found 
reasonable grounds to believe or suspect that all three respondents had 
made sales at prices below the COP in the home market during the POR. 
Thus in accordance with section 773(b) of the Act, we examined whether 
the home market sales of each model were made at prices below their COP 
in substantial quantities over an extended period of time, and whether 
such sales were made at prices which would permit recovery of all costs 
within a reasonable period of time in the normal course of trade.
    We performed a model-specific COP test, in which we examined 
whether each home market sale was priced below the merchandise's COP. 
The Department defines COP as the sum of direct material, direct labor, 
variable and fixed factory overhead, general expenses, and packaging 
costs (19 CFR 353.51(c)(1994)). See Stainless Steel Hollow Products 
from Sweden; Preliminary Results of Antidumping Duty Administrative 
Review, 59 FR 40521 (August 9, 1994). For each model, we compared this 
sum to the reported home market unit price, net of price adjustments 
and movement expenses.
    For each model where less than ten percent, by quantity, of the 
home market sales during the POR were made at prices below the COP, we 
included all sales of that model in the computation of FMV. For each 
model where ten percent or more, but less than ninety percent, of the 
home market sales during the POR were priced below the merchandise's 
COP, we excluded from the calculation of FMV those home market sales 
which were priced below the merchandise's COP, provided that these 
below-cost sales were made over an extended period of time. For each 
model where ninety percent or more of the home market sales during the 
POR were priced below the COP and were made over an extended period of 
time, we disregarded all sales of that model from our analysis. See 
Brass Sheet and Strip from Canada: Preliminary Results of Antidumping 
Duty Administrative Review, 60 FR 50670 (April 27, 1995).
    In order to determine whether below-cost sales had been made over 
an extended period of time, we compared the number of months in which 
below-cost sales occurred for each product to the number of months 
during the POR in which each model was sold. If a product was sold in 
fewer than three months during the POR, we did not exclude the below-
cost sales unless there were below-cost sales in each month of sale. If 
a product was sold in three or more months, we did not exclude the 
below-cost sales unless there were below-cost sales in at least three 
months during the POR. Id.
    Finally, respondents did not provide any information, nor is there 
any information on the record of this proceeding which indicates 
recovery of all costs within a reasonable period of time for sales 
found to have been made at prices below the cost of production. 
Therefore, in accordance with our practice, we have disregarded 
respondents' sales found to have been made at prices below the COP in 
substantial quantities over an extended period of time, which would not 
permit recovery of all costs within a reasonable period of time in the 
normal course of trade.
    We calculated the COP for the merchandise based on the sum of each 
respondent's material costs, fabrication costs and general expenses in 
accordance with section 353.51(c) of the Department's regulations (19 
CFR 353.51(c) (1994)). We adjusted respondents' cost data as described 
below:
    For Hyundai, the Department relied on the submitted COP and 
constructed value (CV) information, except in the following instances 
where the costs were not appropriately quantified or valued:
    1. We reclassified certain capitalized costs from R&D to current 
costs of production. We recalculated R&D costs to reflect the current 
costs incurred for all semiconductors.
    2. We revised interest expense to reflect the proportional amount 
incurred by the semiconductor business.
    For Goldstar, the Department relied on the submitted COP and CV 
information, except in the following instances where the costs were not 
appropriately quantified or valued:
    1. We recalculated R&D costs to reflect the current costs incurred 
for all semiconductors.
    For Samsung, the Department relied on the submitted COP and CV 
information, except in the following instances where the costs were not 
appropriately quantified or valued:
    1. We recalculated R&D costs to reflect the current costs incurred 
for all semiconductors.
    2. We revised interest expense to reflect the proportional amount 
incurred by the semiconductor business.
    When all home market sales of a such or similar product in the 
contemporaneous month (as identified in the July 19, 1994 model match 
memorandum) were excluded from our analysis because the home market 
sales were priced below the COP, or when no home market sales of such 
or similar merchandise were found, then we used the CV of the 
merchandise sold in the United States as the basis for FMV in 
accordance with section 773(e) of the Act. We calculated the CV, in 
accordance with section 773(e) of the Act, as the sum of the cost of 
manufacture of the product sold in the United States, home market 
selling, general and administrative (SG&A) expenses, and home market 
profit. The cost of manufacture of the product sold in the United 
States is the sum of direct material, direct labor, and variable and 
fixed factory overhead expenses. For home market SG&A expenses, in 
accordance with section 773(e)(B)(i) of our regulations, we used the 
larger of the actual SG&A expenses reported by the respondents or ten 
percent of the cost of manufacture, the statutory minimum for foreign 
SG&A expenses. For home market profit, in accordance with section 
773(e)(B)(ii) of our regulations, we used the larger of the actual 
profit reported by the respondents or the statutory minimum of eight 
percent of the sum of cost of manufacture and SG&A expenses. See 
Polyethylene Terephthalate Film, Sheet, and Strip from the Republic of 
Korea; Preliminary Results of Antidumping 

[[Page 47152]]
Duty Administrative Review, 59 FR 35098, 35100 (July 8, 1994).
    We calculated FMV based on delivered prices to unrelated customers 
and, where appropriate, to related customers in the home market. In 
calculating FMV, we made adjustments, where appropriate, for inland 
freight, inland insurance, discounts, rebates, Korean brokerage and 
handling charges, and home market credit expenses. We adjusted for 
Korean consumption tax in accordance with our practice as outlined in 
Siliconmanganese from Venezuela, Preliminary Determination of Sales at 
LTFV, 59 FR 31204 (June 17, 1994). We deducted home market packing 
costs from the home market price and added U.S. packing costs to the 
FMV. We also made, where applicable, difference-in-merchandise 
adjustments.
    For comparison to purchase price sales, pursuant to 19 CFR 353.56, 
we made circumstance-of-sale adjustments to the FMV, where appropriate, 
for bank charges, royalty payments, and advertising. We made further 
adjustments, where appropriate, for U.S. commissions and credit 
expenses in accordance with 19 CFR 353.56(a)(2). Where commissions were 
paid on U.S. sales and not paid on home market sales, we allowed an 
offset to FMV amounting to the lesser of the weighted-average home 
market indirect selling expenses, or the U.S. commissions in accordance 
with 19 CFR 353.56(b) of our regulations.
    For comparison to ESP sales, we made deductions, where appropriate, 
for credit expenses, royalty payments, bank charges and advertising 
expenses. We also allowed an ESP offset to the FMV, amounting to the 
lesser of the weighted-average total of home market indirect selling 
expenses, or he total U.S. indirect selling expenses plus commissions 
in accordance with 19 CFR 353.56(b)(2).
    No other adjustments were claimed or allowed.

Preliminary Results of the Review

    As a result of this review, we preliminarily determine that the 
following margins exist for the POR:

------------------------------------------------------------------------
          Manufacturer/exporter                   Percent  margin       
------------------------------------------------------------------------
Hyundai Electronics Co., Ltd.............  0.202                        
                                           (de minimis)                 
Samsung Electronics Co., Ltd.............  0.9936                       
                                           (de minimis)                 
Goldstar Electron Co., Ltd...............  0.319                        
                                           (de minimis)                 
------------------------------------------------------------------------

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between the USP and the FMV may vary from the percentages 
stated above. Upon completion of the review the Department will issue 
appraisement instructions on each exporter directly to the U.S. Customs 
Service.
    Furthermore, the following deposit requirements will be effective 
for all shipments of dynamic random access memory semiconductors of one 
megabit and above, assembled or unassembled, entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Act.
    (1) The cash deposit rate for the reviewed companies will be those 
rate established in the preliminary results of this review (except that 
no deposit will be required for firms with zero or de minimis margins; 
i.e., margins less than 0.5%);
    (2) For previously reviewed or investigated companies not listed 
above, the cash deposit rate will continue to be the company-specific 
rate published for the most recent period;
    (3) If the exporter is not a firm covered in this review or in the 
original LTFV investigation, but the manufacturer is, the cash deposit 
rate will be the rate established for the most recent period for the 
manufacturer of the merchandise; and
    (4) If neither the exporter nor the manufacturer is a firm covered 
in this or any previous review conducted by the Department, the cash 
deposit rates will be 3.85%, the ``all other'' rate established in the 
LTFV investigation.
    These deposit requirements shall remain in effect until publication 
of the final results of the next administrative review.
    Interested parties may request disclosure within five days of the 
date of publication of this notice, and may request a hearing within 
ten days of the date of publication. Any hearing, if requested, will be 
held as early as convenient for the parties but not later than 44 days 
after the date of publication or the first work day thereafter. Case 
briefs or other written comments from interested parties may be 
submitted not later than 30 days after the date of publication of this 
notice. Rebuttal briefs and rebuttal comments, limited to issues in the 
case briefs, may be filed not later than 37 days after the date of 
publication. The Department will publish the final results of this 
administrative review, including the results of its analysis of issues 
raised in any such written comments.
    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 353.26 to file a certificate regarding the 
reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR 
353.22.

    Dated: August 16, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-22501 Filed 9-8-95; 8:45 am]
BILLING CODE 3510-05-M