[Federal Register Volume 64, Number 196 (Tuesday, October 12, 1999)]
[Notices]
[Pages 55251-55254]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-26590]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-583-827]


Static Random Access Memory Semiconductors From Taiwan; 
Preliminary Results of Antidumping Duty New Shipper Review

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

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SUMMARY: In response to a request by GSI Technology, the Department of 
Commerce is conducting a new shipper review of the antidumping duty 
order on static random access memory semiconductors from Taiwan. The 
period of review is October 1, 1997, through September 30, 1998.
    We have preliminarily determined that sales have been made below 
the normal value by GSI Technology. If these preliminary results are 
adopted in the final results of this review, we will instruct the 
Customs Service to assess antidumping duties on all appropriate 
entries.

EFFECTIVE DATE: October 12, 1999.

FOR FURTHER INFORMATION CONTACT: Shawn Thompson or Irina Itkin, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 
20230; telephone: (202) 482-1776 or (202) 482-0656, respectively.

SUPPLEMENTARY INFORMATION: Unless otherwise indicated, all citations to 
the Tariff Act of 1930, as amended (the Act), are references to the 
provisions effective January 1, 1995, the effective date of the 
amendments made to the Act by the Uruguay Round Agreements Act. In 
addition, unless otherwise indicated, all citations to the Department 
of Commerce regulations are to 19 CFR Part 351 (1998).

Background

    On October 15, 1998, GSI Technology requested that the Department 
of Commerce (the Department) conduct a new shipper review pursuant to 
section 751(a)(2)(B) of the Act and 19 CFR 351.214(b). In this request, 
GSI Technology certified that it did not export the subject merchandise 
to the United States during the period covered by the original less-
than-fair-value (LTFV) investigation (the ``POI''), and that it is not 
affiliated with any company which exported subject merchandise to the 
United States during the POI. Pursuant to 19 CFR 351.214(b)(2)(iv), GSI 
Technology submitted documentation establishing the date on which it 
first entered subject merchandise for consumption into the United 
States, the volume of that shipment, and the date of the first sale to 
an unaffiliated customer in the United States. Based on the above 
information, the Department initiated a new shipper review covering GSI 
Technology (see Static Random Access Memory Semiconductors from Taiwan: 
Initiation of New Shipper Antidumping Duty Administrative Review, 63 FR 
67456 (Dec. 7, 1998)). The Department is now conducting this review in 
accordance with section 751 of the Act and 19 CFR 351.214.
    On December 8, 1998, we issued our questionnaire to GSI Technology. 
We received a response to this questionnaire in January 1999.
    In February and April 1999, we issued supplemental questionnaires 
to GSI Technology. We received responses to these questionnaires in 
March and May 1999, respectively.
    On May 24, 1999, the Department published in the Federal Register a 
notice of postponement of the preliminary results until no later than 
October 4, 1999 (64 FR 27966).
    In June 1999, we issued an additional supplemental questionnaire to 
GSI Technology. We received a response to this questionnaire in July 
1999.
    In July, August, and September 1999, the Department conducted 
verification of the data submitted by GSI Technology, in accordance 
with section 782(i) of the Act and 19 CFR 351.307(b)(1)(iv).
    Also in September 1999, the Department requested that GSI 
Technology submit a revised cost database incorporating the 
verification findings.

Scope of the Review

    The products covered by this review are synchronous, asynchronous, 
and specialty SRAMs from Taiwan, whether assembled or unassembled. 
Assembled SRAMs include all package types. Unassembled SRAMs include 
processed wafers or die, uncut die and cut die. Processed wafers 
produced in Taiwan, but packaged, or assembled into memory modules, in 
a third country, are included in the scope; processed wafers produced 
in a third country and assembled or packaged in Taiwan are not included 
in the scope.
    The scope of this review includes modules containing SRAMs. Such 
modules include single in-line processing modules, single in-line 
memory modules, dual in-line memory modules, memory cards, or other 
collections of SRAMs, whether unmounted or mounted on a circuit

[[Page 55252]]

board. The scope of this review does not include SRAMs that are 
physically integrated with other components of a motherboard in such a 
manner as to constitute one inseparable amalgam (i.e., SRAMs soldered 
onto motherboards).
    The SRAMs within the scope of this review are currently 
classifiable under the subheadings 8542.13.8037 through 8542.13.8049, 
8473.30.10 through 8473.30.90, and 8542.13.8005 of the Harmonized 
Tariff Schedule of the United States (HTSUS). Although the HTSUS 
subheadings are provided for convenience and customs purposes, the 
written description of the scope of this review is dispositive.

Period of Review

    The period of review (POR) is October 1, 1997, through September 
30, 1998.

Use of Partial Facts Available

    We determine that the use of partial facts available is appropriate 
for GSI Technology, in accordance with section 776(a) of the Act. At 
verification, we discovered that the respondent had mis-allocated 
certain rebates received from one of its subcontractors during the POR 
when calculating its difference-in-merchandise (difmer) and constructed 
value (CV) data. Because we find that this mistake caused a significant 
distortion in the reported costs, we determine that GSI Technology's 
cost data is unreliable for use in the preliminary results. Moreover, 
although the correct data exists on the record of this proceeding, we 
are unable to use this data at this time in our preliminary results due 
to the short time between the end of verification and the date of the 
preliminary results. However, we have requested that the respondent 
provide a new cost database which incorporates our verification 
findings, and we may consider this data for purposes of the final 
results.
    Because we find that the respondent's cost data is unuseable in its 
current form, for purposes of the preliminary results we have, pursuant 
to section 776(a)(2)(B) of the Act, based the margin for all U.S. sales 
for which either a difmer adjustment or CV would be required on facts 
available. As facts available, we have used a non-aberrant margin 
calculated for identical price-to-price comparisons, in accordance with 
our practice. See Notice of Final Determination of Sales at Less Than 
Fair Value: Static Random Access Memory Semiconductors From Taiwan, 63 
FR 8909, 8912 (Feb. 23, 1998).
    Finally, we found at verification that GSI Technology failed to 
report certain U.S. sales during the POR. Accordingly, we have also 
based the margin for these sales on facts available. As facts 
available, we have used the same margin noted above.

Level of Trade and Constructed Export Price Offset

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine normal value (NV) based on sales in the 
comparison market at the same level of trade as export price (EP) or 
constructed export price (CEP). The NV level of trade is that of the 
starting-price sales in the comparison market or, when NV is based on 
CV, that of the sales from which we derive selling, general and 
administrative expenses (SG&A) and profit. For EP, the U.S. level of 
trade is also the level of the starting-price sale, which is usually 
from the exporter to the unaffiliated U.S. customer. For CEP, it is the 
level of the constructed sale from the exporter to the importer.
    To determine whether NV sales are at a different level of trade 
than EP or CEP sales, we examine stages in the marketing process and 
selling functions along the chain of distribution between the producer 
and the unaffiliated customer. If the comparison-market sales are at a 
different level of trade and the difference affects price 
comparability, as manifested in a pattern of consistent price 
differences between the sales on which NV is based and comparison-
market sales at the level of trade of the export transaction, we make a 
level-of-trade adjustment under section 773(a)(7)(A) of the Act. 
Finally, for CEP sales, if the NV level is more remote from the factory 
than the CEP level and there is no basis for determining whether the 
difference in the levels between NV and CEP affects price 
comparability, we adjust NV under section 773(a)(7)(B) of the Act (the 
CEP offset provision). See Notice of Final Determination of Sales at 
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from 
South Africa, 62 FR 61731 (Nov. 19, 1997).
    GSI Technology claimed that it made home market sales at two levels 
of trade, which it defined as follows: 1) original equipment 
manufacturers (OEMs) who purchased directly from GSI Technology; and 2) 
OEMs who purchased through the affiliated sales representative. We 
examined the selling activities at each reported marketing stage and 
found that there was no substantive difference in the selling functions 
performed at any of these stages. Consequently, we determine that only 
one level of trade exists with respect to sales made by GSI Technology 
to all home market customers. For a detailed explanation of this 
analysis, see the memorandum entitled ``Preliminary Results of 
Antidumping Duty New Shipper Review on Static Random Access Memory 
Semiconductors from Taiwan,'' dated October 4, 1999 (the ``concurrence 
memorandum'').
    Because we have found that only one level of trade existed in the 
home market during the POR, we conducted an analysis to determine 
whether a CEP offset was warranted. In order to determine whether NV 
was established at a level of trade which constituted a more advanced 
stage of distribution than the level of trade of the CEP, we compared 
the selling functions performed for home market sales with those 
performed with respect to the CEP transaction, which excludes economic 
activities occurring in the United States, pursuant to section 772(d) 
of the Act. We found that GSI Technology performed most of the selling 
functions and services related to U.S. sales at its sales offices in 
the United States, and, therefore, that these selling functions are 
associated with those expenses which we deduct from the CEP starting 
price, as specified in section 772(d) of the Act. Regarding home market 
sales, GSI Technology performed largely the same selling functions for 
these sales as were performed for U.S. sales. Therefore, its sales in 
Taiwan were at a more advanced stage of marketing and distribution 
(i.e., more remote from the factory) than the constructed U.S. level of 
trade, which represents an ex-factory price after the deduction of 
expenses associated with U.S. selling activities. However, because GSI 
Technology sells at only one home market level of trade, the difference 
in the levels of trade cannot be quantified. Because the difference in 
the levels of trade cannot be quantified, but the home market is at a 
more advanced level of trade, we have granted a CEP offset to GSI 
Technology. For further discussion, see the concurrence memorandum 
noted above.

Comparisons to Normal Value

    To determine whether sales of SRAMs from Taiwan were made in the 
United States at less than NV, we compared the CEP to NV. We were 
unable to make price-to-price comparisons involving non-identical 
products because GSI Technology did not provide useable difmer data. 
Moreover, we were unable to make price-to-CV comparisons because GSI 
Technology similarly did not provide usable CV data. Therefore, we 
based the margin for all U.S. sales with no corresponding identical 
home market match on facts available. As facts available, we used a 
non-aberrant

[[Page 55253]]

margin calculated for identical comparisons. See the ``Use of Partial 
Facts Available'' section of this notice for further discussion.

Constructed Export Price

    In accordance with section 772(b) of the Act, we used CEP 
methodology because all sales took place after importation into the 
United States. We revised the reported data based on our findings at 
verification.
    We based CEP on packed, delivered prices to the first unaffiliated 
customer in the United States. We made deductions from CEP for 
discounts, as appropriate. We also made deductions for foreign inland 
freight, international freight, U.S. customs duties and customs user 
fees, U.S. inland freight, and U.S. warehousing expenses, where 
appropriate, in accordance with section 772(c)(2)(A) of the Act.
    We made additional deductions from CEP, where appropriate, for 
credit expenses, advertising expenses, commissions, testing expenses, 
indirect selling expenses, inventory carrying costs, U.S. repacking 
expenses, and U.S. further manufacturing costs, in accordance with 
section 772(d) of the Act. Regarding credit expenses, we found that GSI 
Technology had not received payment for certain sales as of the date of 
verification. Consequently, we used the last day of GSI Technology's 
U.S. sales verification as the date of payment for any unpaid amount 
and recalculated credit expenses accordingly. Regarding testing 
expenses, we found that GSI Technology had not reported these expenses 
for certain products during the POR. Accordingly, we based the testing 
expenses for these products on facts available. As facts available, we 
used the highest testing expenses reported for any other product 
produced in the same quarter.
    Pursuant to section 772(d)(3) of the Act, we further reduced the 
starting price by an amount for profit, to arrive at CEP. As noted in 
the ``Use of Partial Facts Available'' section above, we have 
determined that GSI Technology's cost data is unusable at this time, 
based on our findings at verification. Consequently, we are unable to 
use this data for purposes of determining the CEP profit rate, in 
accordance with section 772(f) of the Act. Rather, as facts available, 
we have derived a CEP profit rate using the data shown on GSI 
Technology's consolidated financial statements for the fiscal year 
ended March 31, 1998.

Normal Value

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
the aggregate volume of home market sales of the foreign like product 
is five percent or more of the aggregate volume of U.S. sales), we 
compared the volume of GSI Technology's home market sales of the 
foreign like product to the volume of U.S. sales of subject 
merchandise, in accordance with section 773(a)(1)(C) of the Act. Based 
on this comparison, we determined that GSI Technology had a viable home 
market during the POR. Consequently, we based NV on home market sales.
    GSI Technology made sales of SRAMs to an affiliated party in the 
home market during the POR. However, because GSI Technology sold 
different models to affiliated and unaffiliated parties, we were unable 
to test these sales to ensure that, on average, they were made at 
``arm's-length'' prices, in accordance with 19 CFR 351.403(c). (See 
letter from James Maeder to H.W. Chen, dated February 16, 1999.) 
Accordingly, we did not include in our analysis any sales made to the 
affiliated party because we were unable to determine that they were at 
``arm's-length.'' Pursuant to 19 CFR 351.403(d), we based our analysis 
on the downstream sales of the affiliate to its unaffiliated customers.
    For price-to-price comparisons, we based NV on ex-warehouse or 
delivered prices to home market customers. Where appropriate, we 
deducted home market movement charges, including foreign inland freight 
and off-site warehousing expenses, in accordance with section 
773(a)(6)(B) of the Act. We also deducted home market credit expenses 
and testing expenses, pursuant to section 773(a)(6)(C)(iii) of the Act. 
We disallowed a claim made for foreign exchange losses associated with 
sales to the affiliated distributor. We also disallowed a claim made 
for home market customs fees because GSI Technology was unable to 
demonstrate at verification that these expenses related to home market 
sales. For further discussion, see the concurrence memorandum.
    We deducted home market indirect selling expenses, including 
inventory carrying costs and other indirect selling expenses, up to the 
amount of indirect selling expenses incurred on U.S. sales, in 
accordance with section 773(a)(7)(B) of the Act. Where applicable, in 
accordance with 19 CFR 351.410(e), we offset any commission paid on a 
U.S. sale by reducing the NV by any home market indirect selling 
expenses remaining after the deduction for the CEP offset, up to the 
amount of the U.S. commission.

Currency Conversion

    Generally, we make currency conversions into U.S. dollars based on 
the exchange rates in effect on the dates of the U.S. sales as 
certified by the Federal Reserve Bank. However, section 773A of the Act 
directs the Department to use a daily exchange rate in order to convert 
foreign currencies into U.S. dollars unless the daily rate involves a 
fluctuation. It is the Department's practice to find that a fluctuation 
exists when the daily exchange rate differs from the benchmark rate by 
2.25 percent. The benchmark is defined as the moving average of rates 
for the past 40 business days. When we determine a fluctuation to have 
existed, we substitute the benchmark for the daily rate, in accordance 
with established practice.

Preliminary Results of the Review

    We preliminarily determine that the following margin exists for GSI 
Technology during the period October 1, 1997, through September 30, 
1998:

------------------------------------------------------------------------
                                                                Margin
               Manufacturer/producer/exporter                 percentage
------------------------------------------------------------------------
GSI Technology.............................................        18.71
------------------------------------------------------------------------

    The Department will disclose to parties the calculations performed 
in connection with these preliminary results within five days of the 
date of publication of this notice. Interested parties may request a 
hearing within 30 days of publication. Any hearing, if requested, will 
be held two days after the date rebuttal briefs are filed. Interested 
parties may submit case briefs not later than 30 days after the date of 
publication of this notice. Rebuttal briefs, limited to issues raised 
in the case briefs, may be filed not later than 35 days after the date 
of publication of this notice. The Department will issue the final 
results of this new shipper review, including the results of its 
analysis of issues raised in any such written comments, within 90 days 
of the issuance of these preliminary results.
    Upon completion of the new shipper review, the Department shall 
determine, and the Customs Service shall assess, antidumping duties on 
all appropriate entries. Pursuant to 19 CFR 351.212(b)(1), we have 
calculated importer-specific assessment rates based on the ratio of the 
total amount of antidumping duties calculated for the examined sales to 
the total entered value of that importer's entries of

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subject merchandise during the POR. Pursuant to 19 CFR 351.106(c)(2), 
we will instruct the Customs Service to liquidate without regard to 
antidumping duties any entries for which the assessment rate is de 
minimis (i.e., less than 0.50 percent). The assessment rate will be 
assessed uniformly on all entries of that particular importer made 
during the POR. The Department will issue appraisement instructions 
directly to the Customs Service.
    Further, the following deposit requirements will be effective for 
all shipments of SRAMs from Taiwan entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this new shipper review, as provided for by section 
751(a)(2)(C) of the Act: (1) The cash deposit rates for the reviewed 
company will be the rate established in the final results of this 
review; (2) for previously investigated companies, 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 the 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) the cash deposit rate 
for all other manufacturers or exporters will continue to be 41.75 
percent, the all others rate established in the LTFV investigation.
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.
    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) 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 new shipper review and 
notice are in accordance with sections 751(a)(2)(B) and 777(i)(1) of 
the Act.

    Dated: October 4, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-26590 Filed 10-8-99; 8:45 am]
BILLING CODE 3510-DS-P