[Federal Register Volume 63, Number 222 (Wednesday, November 18, 1998)]
[Notices]
[Pages 64040-64042]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-30855]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-583-832]


Initiation of Antidumping Duty Investigation: Dynamic Random 
Access Memory Semiconductors From Taiwan

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

ACTION: Initiation of antidumping investigation.

EFFECTIVE DATE: November 18, 1998.

FOR FURTHER INFORMATION CONTACT: Alexander Amdur at (202) 482-5346, 
John Conniff at (202) 482-1009 or Ron Trentham at (202) 482-6320, 
Import Administration--Room B099, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230.

Initiation of Investigation

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (``the Act'') by 
the Uruguay Round Agreements Act (``URAA''). In addition, unless 
otherwise indicated, all citations to the Department's regulations are 
references to the provisions codified at 19 CFR Part 351 (1998).

The Petition

    On October 22, 1998, the Department of Commerce (``the 
Department'') received a petition filed in proper form by Micron 
Technology, Inc. (``petitioner''). The Department received supplemental 
information to the petition on November 5, 1998. In accordance with 
section 732(b) of the Act, petitioner alleges that imports of dynamic 
random access memory semiconductors of one megabit and above 
(``DRAMs'') from Taiwan are being, or are likely to be, sold in the 
United States at less than fair value within the meaning of section 731 
of the Act, and that such imports are materially injuring, or 
threatening material injury to, an industry in the United States. The 
Department finds that petitioner filed the petition on behalf of the 
domestic industry because it is an interested party as defined in 
section 771(9)(C) of the Act, and has demonstrated sufficient industry 
support with respect to the antidumping investigation it is requesting 
the Department to initiate. See Determination of Industry Support for 
the Petition below.

Scope of Investigation

    The products covered by this investigation are DRAMs from Taiwan, 
whether assembled or unassembled. Assembled DRAMs include all package 
types. Unassembled DRAMs include processed wafers, uncut die, and cut 
die. Processed wafers fabricated in Taiwan, but packaged or assembled 
into finished semiconductors in a third country are included in the 
scope. Wafers fabricated in a third country and assembled or packaged 
in Taiwan are not included in the scope.
    The scope of this investigation 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''), dual in-line memory modules 
(``DIMMs''), memory cards or other collections of DRAMs whether mounted 
or unmounted on a circuit board. Modules that contain other parts that 
are needed to support the function of memory are covered. Only those 
modules that contain additional items that 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. Modules 
containing DRAMs made from wafers fabricated in Taiwan, but either 
assembled or packaged into finished semiconductors in a third country, 
are also included in the scope.
    The scope includes, but is not limited to, video RAM (``VRAM''), 
Windows RAM (``WRAM''), synchronous graphics RAM (``SGRAM''), as well 
as various types of DRAM, including fast page-mode (``FPM''), extended 
data-out (``EDO''), burst extended data-out (``BEDO''), synchronous 
dynamic RAM (``SDRAM''), and ``Rambus'' DRAM (``RDRAM''). The scope of 
this investigation also includes any future density, packaging or 
assembling of DRAMs. The scope of this investigation does not include 
DRAMs or memory modules that are reimported for repair or replacement.
    The DRAMS subject to this investigation are currently classifiable 
under subheadings 8542.13.80.05, 8542.13.80.24 through 8542.13.80.34 of 
the Harmonized Tariff Schedule of the United States (``HTSUS''). Also 
included in the scope are Taiwanese DRAM modules, described above, 
entered into the United States under subheading and 8473.30.10.90 of 
the HTSUS or possibly other HTSUS numbers. Although the HTSUS 
subheadings are provided for convenience and customs purposes, the 
written description of the scope of this investigation is dispositive.
    As we discussed in the preamble to the Department's regulations (62 
FR 27323), we are setting aside a period for parties to raise issues 
regarding product coverage. The Department encourages all parties to 
submit such comments by December 2, 1998. Comments should be addressed 
to Import Administration's Central Records Unit at Room 1874, U.S. 
Department of Commerce, Pennsylvania Avenue and 14th Street, NW, 
Washington, DC, 20230. This period of scope consultation is intended to 
provide the Department with ample opportunity to consider all comments 
and to consult with parties prior to the issuance of the preliminary 
determination.

Determination of Industry Support for the Petition

    Section 732(b)(1) of the Act requires that petitions be filed on 
behalf of a domestic industry. Section 732(c)(4)(A) of the Act provides 
that a petition meets this requirement if the domestic producers or 
workers who support the petition account for: (i) at least 25 percent 
of the total production of the domestic like product; and (ii) more 
than 50 percent of the production of the domestic like product produced 
by that portion of the industry expressing support for, or opposition 
to, the petition.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers of a domestic like product. Thus, to determine whether the 
petition has the requisite industry support, the Act directs the 
Department to look to producers and workers who account for production 
of the domestic like product. The International Trade Commission 
(``ITC''), which is responsible for determining whether ``the domestic 
industry'' has been injured, must also determine what constitutes a 
domestic like product to define the industry. However, while both the 
Department and the ITC must apply the same statutory definition of 
domestic like product, they do so for different purposes and pursuant 
to separate and distinct authority. In addition, the Department's 
determination is subject to limitations of time and information.

[[Page 64041]]

Although this may result in different definitions of the domestic like 
product, such differences do not render the decision of either agency 
contrary to the law.1
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    \1\ See Algoma Steel Corp., Ltd. v. United States, 688 F. Supp. 
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays 
and Display Glass Therefor from Japan: Final Determination; 
Rescission of Investigation and Partial Dismissal of Petition, 56 FR 
32376, 32380-81 (July 16, 1991).
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    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation,'' i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition. As noted earlier, the scope of the petition is limited to 
DRAMs of one megabit and above. This is petitioner's sole proposed 
domestic like product. The Department has no basis on the record to 
find this domestic like product definition clearly inadequate. The 
Department has, therefore, adopted the domestic like product definition 
set forth in the petition.
    In this case, the Department determined that the petition and 
supplemental information contained adequate evidence of sufficient 
industry support; therefore, polling was not necessary. See Initiation 
Checklist, dated November 12, 1998, (public document on file in the 
Central Records Unit of the Department of Commerce, Room B-099). 
Additionally, no person who would qualify as an interested party 
pursuant to section 771(9)(A),(C), or (D) of the Act has expressed 
opposition to this petition. Accordingly, the Department determines 
that this petition is filed on behalf of the domestic industry within 
the meaning of section 732(b)(1) of the Act.

Less Than Fair Value Allegation

    Petitioner identified the following Taiwanese producers/exporters 
in the petition: Mosel-Vitelic, Inc., Winbond Electronics, Acer 
Semiconductor Manufacturing Inc., Powerchip Semiconductor Corp., United 
Microelectronics Corporation, Taiwan Semiconductor Manufacturing 
Corporation, Macronix International Co., Ltd., Alliance Semiconductor 
Corporation, Etron Technology, Inc., Taiwan Memory Technology, Inc. and 
G-Link Technology Corp. Petitioner further identified Vanguard 
International Semiconductor Corporation (``Vanguard'') and Nan Ya 
Technology Corporation (``Nan Ya'') as two major producers/exporters of 
DRAMs from Taiwan. Petitioner based export price (``EP'') on price 
quotes obtained by petitioner's sales personnel in the ordinary course 
of business. These price quotes were for delivery of 4x4 16 Megabit EDO 
DRAMs. Petitioner explained that it is Micron's practice to receive 
verbal quotes without written documentation and supplied an affidavit 
signed by a Micron sales representative attesting to the validity of 
the price quotes. All U.S. market price quotes were denominated in 
dollars and petitioner made no adjustments to these price quotes.
    With respect to normal value (``NV'') petitioner used prices, based 
on written price quotes for 4x4 16 megabit EDO DRAMs produced by 
Vanguard and Nan Ya. The price quotes were obtained by a private market 
research firm. Petitioner made no adjustment to these home market price 
quotes.
    Petitioner alleged that sales of the foreign like product were made 
at prices below the cost of production within the meaning of section 
773(b) of the Act and requested the Department to initiate a country-
wide sales below cost investigation. To support this claim, petitioner 
compared the home market prices to each company's cost of production 
(``COP''). Petitioner calculated the COP for Vanguard and Nan Ya based 
on Micron's actual production experience with adjustments for known 
differences in costs incurred in Taiwan and the United States.
    Petitioner determined the die sizes, mask levels, metal levels, and 
process technologies from examination of actual DRAM die from Vanguard 
and Nan Ya. For the purposes of the petition, the processing yields 
were assumed to be the same as those experienced by Micron. Petitioner 
derived labor rates from the Bureau of Labor Statistics. Because the 
most recent data available for Taiwan was from 1996, petitioner 
adjusted the labor rates for the 1997 inflation rate.
    Petitioner adjusted utility expenses using the ratio of U.S. energy 
costs to Taiwanese energy costs, based on OECD energy price data. For 
Vanguard, petitioner derived general and administrative (``G&A'') 
expenses, interest expenses, and research and development (``R&D'') 
expenses from the company's financial statements for the six months 
ending June 30, 1998. See Exhibit 6 of the petition. Financial 
statements for the 1997 fiscal year were not available so these 
represent the most recent publicly available financial statements for 
Vanguard.
    Petitioner was unable to obtain financial statements for Nan Ya and 
therefore based its G&A expenses and R&D expenses on Vanguard's 
financial statements. Interest expenses were calculated using the 1997 
consolidated financial statements of Nan Ya's parent company, Nan Ya 
Plastics. See Exhibit 5 of the supplement to the petition.
    Petitioner utilized Micron's intellectual property expenses, which 
reflect royalties paid to other companies for use of their technology 
in DRAM production. Again, petitioner believes that this estimate is 
conservative since Micron maintains a larger patent portfolio than 
either Vanguard or Nan Ya. By having a smaller patent portfolio, 
Vanguard and Nan Ya need more licensing agreements for DRAMs 
production.
    Petitioner conservatively estimated a profit rate of zero for 
constructed value. Because the home market prices of Vanguard and Nan 
Ya were lower than the COP, normal value was based on CV for comparison 
to the U.S. prices. Petitioner used exchange rates as published by the 
Federal Reserve Bank of New York for currency conversions.
    Based on comparisons of EP to NV, the petitioner estimated dumping 
margins from 48 to 69 percent.

Initiation of Cost Investigations

    Pursuant to section 773(b) of the Act, petitioners provided 
information demonstrating reasonable grounds to believe or suspect that 
sales in the home market of Taiwan were made at prices below the COP 
and, accordingly, requested the Department to conduct a country-wide 
sales-below-COP investigation in connection with the requested 
antidumping investigation in Taiwan. The Statement of Administrative 
Action (``SAA''), accompanying the URAA, H.R. Doc. No. 103-316, vol. 1 
at 833 (1994), states that an allegation of sales below COP need not be 
specific to individual exporters or producers. The SAA also states that 
``Commerce will consider allegations of below-cost sales in the 
aggregate for a foreign country, just as Commerce currently considers 
allegations of sales at less than fair value on a country-wide basis 
for purposes of initiating an antidumping investigation.'' Id.
    Further, the SAA provides that ``new section 773(b)(2)(A) retains 
the current requirement that Commerce have `reasonable grounds to 
believe or suspect' that below-cost sales have occurred before 
initiating such an investigation.'' Reasonable grounds will ``exist 
when an interested party provides specific factual information on costs 
and prices, observed or

[[Page 64042]]

constructed, indicating that sales in the foreign market in question 
are at below-cost prices.'' Id. Based upon the comparison of the prices 
from the petition for the representative foreign like products to its 
adjusted costs of production, in accordance with section 
773(b)(2)(A)(i) of the Act, we find the existence of ``reasonable 
grounds to believe or suspect'' that sales of these foreign like 
products in Taiwan were made below their respective COP's. Accordingly, 
the Department is initiating the requested country-wide cost 
investigation.

Initiation of Antidumping Investigation

    We have examined the petition on DRAMs from Taiwan and have found 
that it meets the requirements of section 732 of the Act, including the 
requirements concerning allegations of the material injury or threat of 
material injury to the domestic producers of a domestic like product by 
reason of the complained-of imports, allegedly sold at less than fair 
value. Therefore, we are initiating an antidumping duty investigation 
to determine whether imports of DRAMs from Taiwan are being, or are 
likely to be, sold in the United States at less than fair value. Unless 
extended, we will make our preliminary determination by April 1, 1999.

Distribution of Copies of the Petition

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of the petition has been provided to the representatives 
of the authorities of Taiwan. We will attempt to provide a copy of the 
public version of the petition to each exporter named in the petition 
(as appropriate).

ITC Notification

    We have notified the ITC of our initiation, as required by section 
732(d) of the Act.

Preliminary Determination by the ITC

    The ITC will determine by December 7, 1998, whether there is a 
reasonable indication that imports of DRAMs from Taiwan are causing 
material injury, or threatening to cause material injury, to a U.S. 
industry. A negative ITC determination in the investigation will result 
in this investigation being terminated; otherwise, the investigation 
will proceed according to statutory and regulatory time limits.
    This notice is published pursuant to section 771 (i) of the Act.

    Dated: November 12, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-30855 Filed 11-17-98; 8:45 am]
BILLING CODE 3510-DS-P