[Federal Register Volume 73, Number 116 (Monday, June 16, 2008)]
[Notices]
[Pages 34045-34048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-13402]


-----------------------------------------------------------------------

DEPARTMENT OF LABOR

Employment and Training Administration

[TA-W-61,601]


Intel Corporation Fab 23 Colorado Springs, CO; Notice of Negative 
Determination on Remand

    On March 24, 2008, the U.S. Court of International Trade (USCIT) 
granted the Department of Labor's request for voluntary remand to 
conduct further investigation in Former Employees of Intel Corporation 
v. U.S. Secretary of Labor, Court No. 07-00420.
    On May 30, 2007, an official of Intel Corporation, Fab 23, Colorado 
Springs, Colorado (subject firm) filed a petition for Trade Adjustment 
Assistance (TAA) and Alternative Trade Adjustment Assistance (ATAA) on 
behalf of workers and former workers of the subject firm. The subject 
firm official stated that the subject firm produced ``WiFi products'' 
for Intel Corporation (Intel) and communication microprocessors for a 
company that replaced purchases from the subject firm with products 
manufactured by a Taiwanese company. The official further stated in the 
petition that ``As a result of the production of these two product 
lines going overseas, Fab 23 no longer has product to build and will be 
ceasing production on August 4, 2007.'' AR 2-3.
    The institution of the TAA petition was published in the Federal 
Register on June 14, 2007 (72 FR 32915). AR 10-11.
    In determining whether a petitioning worker group has met the 
statutory criteria, the Department refers to the applicable regulation, 
29 CFR part 90, for guidance.
    During the initial investigation, the subject firm official stated 
that the subject firm produced ``silicon wafers'' and that the worker 
separations were due to the subject firm's customer shifting to another 
company. AR 12. The company official also stated that the subject firm 
made silicon wafers for wireless fidelity (WiFi) chips and that the 
wafers were a component of the WiFi cards imported into the United 
States. The company official further stated that the subject firm 
shifted silicon wafer production to Taiwan. AR 13. Further, information 
provided during the initial investigation confirmed that the subject 
firm produced silicon wafers bearing WiFi chips and communications 
microprocessors, that the subject workers were not separately 
identifiable by product line, and that the subject firm would close on 
August 4, 2007 due to the shift of production to Taiwan during the 
second and third quarters of 2007 (April-September 2007). AR 14.
    The initial investigation further revealed that subject firm's 
production of silicon wafers increased in 2006 from 2005 levels and 
increased during January through April 2007 from January through April 
2006 levels. AR 16.
    The Department's Notice of negative determination, issued on June 
15, 2007, regarding the subject workers' eligibility to apply for TAA/
ATAA stated that sales and production for silicon wafers increased in 
2005, 2006, and year to date 2007, that the subject firm did not import 
silicon wafers, and that the subject firm did not shift production of 
silicon wafers to a foreign country during the relevant period. AR 23-
25. The determination published in the Federal Register on June 28, 
2007 (72 FR 35517). AR 26-30.
    In a letter dated July 14, 2007, a former worker, David Alexander, 
requested administrative reconsideration of the Department's negative 
determination. AR 39. The request for reconsideration alleged:
    (1) That when Intel Corporation (Intel) sold the rights to the 
``Hermon'' chip to another company, Intel became an agent of that 
principal company, and, subsequently, the subject workers became 
employees of the principal company;
    (2) That the subject firm did not produce silicon wafers but 
``manufactures electronic circuits * * * on a silicon wafer'';
    (3) That ``(a) INTEL buys the bare silicon wafer from a supplier, 
(b) Fab 23 then manufactures the electronic circuit on the wafer called 
a die and (c) then die is tested and assembly. Item c can be done else 
where, I believe at this time (July 2007) Marvel chooses elsewhere'';
    (4) That the subject workers are secondary/downstream employees to 
the so-called principal company; and
    (5) That the principal company's shift of production to Taiwan is a 
basis for TAA certification of the subject workers. AR 40-43.
    In the request for reconsideration, Mr. Alexander stated that 
``packaged dies are called `chips.' '' AR 41.
    During the reconsideration investigation, the Department confirmed 
that a company, Marvel, purchased from Intel the rights to the Hermon 
chip, and that, under the agreement, the subject firm would produce 
silicon wafers bearing the Hermon chip until Marvel's Taiwanese 
supplier was fully operational. The subject firm ceased production in 
April 2007 and the last shipment of silicon wafers from the subject 
firm to Marvel was in the second quarter of 2007. AR 54-55. The 
Department also confirmed that the articles produced at the subject 
firm were silicon wafers bearing ``WiFi semiconductor chips.'' AR 57.
    The subject firm also provided information about Intel's 
semiconductor chip production process.
    The subject firm purchased bare silicon wafers from various 
vendors, AR 66, then used a photolithographic printing process to 
fabricate each chip onto the silicon wafer. AR 57, 65, 66. Each chip is 
called a die and is tested on the wafer before it was separated from 
the silicon wafer. AR 65, 74. The process of separating chips from the 
wafer is called ``dicing'' or ``scribing.'' AR 113.
    The silicon wafers bearing WiFi semiconductor chips were sent from 
the subject firm to other Intel facilities. At these facilities, the 
wafers were diced and the semiconductor chips were packaged. AR 65-66, 
101. The packaging of the chip entails ``mounting the chip on a stamped 
lead-wire harness in a process called die bonding, then encapsulating 
this assembly in the final package.'' AR 113.
    Without this packaging process, the chip could not electrically 
communicate outside of itself, could not be placed into a motherboard, 
and had no customer application. AR 65-66. The dicing of silicon wafers 
and the

[[Page 34046]]

packaging of dies used in WiFi products for Intel occur in Taiwan and 
the Philippines, with testing of the packaged dies occurring in 
Malaysia and the Philippines. AR 66, 101. The separation of Marvel's 
Hermon semiconductor chip from the silicon wafer and the packaging of 
Hermon chips occurs in Korea, with the testing occurring in the 
Philippines. AR 66.
    During the reconsideration, the Department contacted the subject 
firm and ascertained that the subject firm did not shift production to 
a country that is a party to a free trade agreement with the United 
States or named as a beneficiary under the Andean Trade Preferences 
Act, the African Growth and Opportunity Act or the Caribbean Basin 
Economic Recovery Act, AR 55, 56, 70, 101. Through contact with the 
subject firm, the Department also confirmed that the articles imported 
by Intel are not silicon wafers bearing semiconductor chips, dies, or 
packaged dies but are WiFi cards. AR 101-102.
    The negative determination on reconsideration, issued on September 
26, 2007, stated that the subject firm produced silicon wafers and 
explained that since Taiwan is not a country that is a party to a free 
trade agreement with the United States or named as a beneficiary under 
the Andean Trade Preferences Act, the African Growth and Opportunity 
Act or the Caribbean Basin Economic Recovery Act, the subject workers 
cannot be certified for TAA based on a shift of production to that 
country absent evidence of increased imports (actual or likely) of like 
or directly competitive articles following the shift of production to 
another country. The determination also stated that the subject workers 
are not secondary workers because the subject firm neither supplied a 
component part to a buyer nor finished or assembled a final product for 
a buyer. AR 114-120. The Department's Notice determination was 
published in the Federal Register on October 3, 2007 (72 FR 56387). AR 
121-123.
    By letter dated November 5, 2007, former workers of the subject 
firm applied to the USCIT for review. The complaint alleged that ``the 
Department of Labor decision is flawed by lack of technical knowledge 
and adherence to previous CIT decisions.''
    The USCIT granted the Department's request for voluntary remand, 
and directed the Department to determine whether, following the subject 
firm's shift of semiconductor wafer production to a foreign country, 
there were (actual or likely) increased imports of articles like or 
directly competitive with semiconductor wafers produced by the subject 
firm.
    Mr. Alexander stated in the request for reconsideration that 
packaged dies are referred to as chips. AR 41. However, the subject 
firm refers to semiconductor devices, on the silicon wafer or separated 
from the wafer, as chips. AR 57, 65, 66.
    In order to have consistent terminology during the course of the 
remand determination, the Department refers to a semiconductor device 
on the wafer as a chip, a chip separated from the wafer as a die, and a 
packaged die as an integrated circuit. The terminology is defined in a 
pamphlet titled ``How to Make an Integrated Circuit.'' AR 113-114.
    In their March 26, 2008 letter, Plaintiffs alleged that the 
Department misidentified the article produced at the subject firm 
during the relevant period, that semiconductor chips produced at the 
subject firm were like or directly competitive with imported 
semiconductor chips, and that it is possible that if ``Intel retained 
production of the Hermon chips,'' the subject firm would have stayed 
open. SAR 2-3.
    To apply for TAA, the group eligibility requirements under Section 
222(a) the Trade Act of 1974, as amended, must be met. The group 
eligibility requirements can be satisfied in one of two ways:
    I. Section 222(a)(2)(A)--
    A. A significant number or proportion of the workers in such 
workers' firm, or an appropriate subdivision of the firm, have become 
totally or partially separated, or are threatened to become totally or 
partially separated; and
    B. The sales or production, or both, of such firm or subdivision 
have decreased absolutely; and
    C. Increased imports of articles like or directly competitive with 
articles produced by such firm or subdivision have contributed 
importantly to such workers' separation or threat of separation and to 
the decline in sales or production of such firm or subdivision; or
    II. Section 222(a)(2)(B)--
    A. A significant number or proportion of the workers in such 
workers' firm, or an appropriate subdivision of the firm, have become 
totally or partially separated, or are threatened to become totally or 
partially separated; and
    B. There has been a shift in production by such workers' firm or 
subdivision to a foreign country of articles like or directly 
competitive with articles which are produced by such firm or 
subdivision; and
    C. One of the following must be satisfied:
    1. The country to which the workers' firm has shifted production of 
the articles is a party to a free trade agreement with the United 
States; or
    2. The country to which the workers' firm has shifted production of 
the articles is a beneficiary country under the Andean Trade Preference 
Act, African Growth and Opportunity Act, or the Caribbean Basin 
Economic Recovery Act; or
    3. There has been or is likely to be an increase in imports of 
articles that are like or directly competitive with articles which are 
or were produced by such firm or subdivision.
    Because the subject firm ceased production in April 2007, AR 54-55, 
the Department determines that section 222(a)(2)(A)(A) and (B) have 
been met. Further, because the subject firm has shifted semiconductor 
wafer production to a foreign country, the Department determines that 
section 222(a)(2)(B)(A) and (B) have been met.
    The only issues in the case at hand, therefore, are whether the 
subject worker group has satisfied section 222(a)(2)(A)(C)--increased 
imports of like or directly competitive products contributed 
importantly to subject firm sales and/or production declines and worker 
separations--or section 222(a)(2)(B)(C)--shift of production to a 
qualified country and/or increased imports following the shift of 
production to a foreign country.

Article Produced by the Subject Firm During the Relevant Period

    Plaintiffs allege that the subject firm did not produce silicon 
wafers but produced semiconductor chips in wafer form and that the 
subject firm may have produced dies and/or packaged dies (integrated 
circuits) during the relevant period. SAR 2-3.
    In support of the allegation that the subject firm did not produce 
silicon wafers, Plaintiffs submitted a declaration by Mr. Alexander, 
dated May 1, 2008, SAR 55-57 and a supplemental declaration, dated May 
7, 2008, by Mr. Alexander. SAR 61.
    In the May 1, 2008 declaration, Mr. Alexander stated that ``I 
performed a variety of complex operations and routine technical duties 
in a wafer fabrication environment'' and ``Fab 23 manufactured 
semiconductor chips on silicon wafers.'' Mr. Alexander also stated that 
the subject firm produced ``silicon wafers, which * * * contain 
multiple semiconductor chips'' and that a ``wafer sort'' was conducted 
to identify defective chips. Mr. Alexander further stated that 
``Following the wafer sort

[[Page 34047]]

process, INTEL typically would cut semiconductor chips from each 
silicon wafer; however, these tasks could be undertaken outside of 
INTEL.'' SAR 55. Exhibit 1 of the declaration identifies the activities 
that occur at the subject firm as ``Preparing wafer for 
manufacturing,'' ``Manufacturing of dies/chips on wafer,'' and ``Wafer 
Sort.'' SAR 57.
    In the May 7, 2008 declaration, Mr. Alexander stated that ``My 
responsibilities included a variety of duties directly related to the 
preparation, manufacturing and testing of silicon wafers at Fab 23.'' 
The supplemental declaration did not address the allegation that the 
subject firm may have produced dies and/or packaged dies (integrated 
circuits). SAR 61.
    The subject firm, in an earlier submission, explained that the bare 
silicon wafers were purchased from various vendors and that the 
articles produced at the subject firm were silicon wafers bearing 
semiconductor chips (these wafers are also referred to in the industry 
as semiconductor wafers). AR 57, 65, 66. During the remand 
investigation, the subject firm stated that the articles that left 
Intel, Fab 23 and were sent to its customer were semiconductor wafers, 
SAR 31, 32, 64-73, and that semiconductor wafers were sold uncut and 
unpackaged. SAR 32. A subject firm official sent pictures of the 
article produced at the subject firm, SAR 65-68, which show that the 
article is an eight-inch diameter wafer, SAR 66, with multiple chips on 
it. SAR 64-68.
    Based on previously-submitted information and additional 
information obtained during the remand investigation, the Department 
determines that, during the relevant period, the subject firm did not 
produce silicon wafers but produced semiconductor wafers.

Subject Worker Were Not Adversely-Impacted by Increased Imports

    The Trade Act of 1974 provides for certification in cases in which 
production of an article was shifted to a country that is neither a 
party to a Free Trade Agreement nor a beneficiary of the Andean Trade 
Preference Act, the African Growth and Opportunity Act or the Caribbean 
Basin Economic Recovery Act only if the increased imports are of 
articles like or directly competitive with articles produced by the 
subject firm.
    The articles produced by the subject firm were eight-inch diameter 
semiconductor wafers. SAR 64-68. The articles imported by the subject 
firm are WiFi cards. AR 101-102.
    The applicable regulation, 29 CFR 90.2, defines ``like'' articles 
as ``those which are substantially identical in inherent or intrinsic 
characteristics (i.e., materials from which the articles are made, 
appearance, quality, texture, etc.)''
    The semiconductor wafers produced at the subject firm were made 
with a silicon base and measured eight inches in diameter. AR 57, 65, 
66, SAR 64-68. A WiFi card is a portable, electronic device that 
consists of multiple parts. AR 108-111. Because these two articles are 
markedly different, they do not meet the definition of ``like 
articles'' in 29 CFR 90.2, and the Department determines that WiFi 
cards are not ``like'' semiconductor wafers.
    29 CFR 90.2 defines ``directly competitive'' articles as those 
articles ``which, although not substantially identical in their 
inherent or intrinsic characteristics, are substantially equivalent for 
commercial purposes (i.e., adapted to the same uses and essentially 
interchangeable therefore).''
    The semiconductor wafers produced at the subject firm cannot be 
used in any capacity, even though chips on them may be fully 
functional, because until the chip is cut away from the wafer (becomes 
a die) and is packaged, the chip cannot communicate outside of itself. 
AR 65-66.
    A WiFi card consists of an integrated circuit and can be inserted 
into a laptop computer for immediate use. AR 108-111. The integrated 
circuit is a mere component of the WiFi card, and the Department has 
consistently determined that components cannot be considered like or 
directly competitive with the finished product. Because these two 
articles do not meet the definition of ``directly competitive 
articles'' in 29 CFR 90.2, the Department determines that semiconductor 
wafers are not directly competitive with WiFi cards.
    Based on the afore-mentioned regulation and information, the 
Department determines that the alleged imports are not like or directly 
competitive with the semiconductor wafers that were produced at the 
subject firm, and, as such, the subject workers cannot be adversely 
impacted by the increased imports by the subject firm.
    During the remand investigation, the Department surveyed the 
subject firm's only declining customer to determine whether it had 
increased its imports (relatively or absolutely) of semiconductor 
wafers (and articles like or directly competitive with semiconductor 
wafers). SAR 37-40, 51-53. Because there were no such increased 
imports, SAR 53, the Department determines that the subject workers 
cannot be adversely impacted by increased imports by the subject firm's 
declining customer.

Whether Subject Firm Would Have Stayed Open if Intel Retained 
Production of Hermon Chip Is Irrelevant

    Plaintiff further allege that it is possible that if ``Intel 
retained production of the Hermon chips,'' the subject firm would have 
stayed open. SAR 2-3.
    Because the statute requires the Department to consider events that 
occurred during the relevant period, the Department does not predict 
possible results based on events that did not occur. As such, the 
Department determines that this allegation is irrelevant.

Subject Firm Did Not Shift Production to a Country With Whom the U.S. 
Has a Free Trade Agreement

    The U.S. does not have a free trade agreement with Taiwan. 
Therefore, a shift of production to Taiwan cannot be a basis for TAA 
certification for the subject worker group.
    Based on the information obtained during the initial investigation, 
the reconsideration investigation, and the remand investigation, the 
Department determines that, in the case at hand, neither section 
222(a)(2)(A)(C) nor section 222(a)(2)(B)(C) have been met. Therefore, 
the Department determines that the group eligibility criteria set forth 
in the Trade Act of 1974, as amended, has not been met.
    In addition, in accordance with section 246 of the Trade Act of 
1974, as amended, the Department herein presents the results of its 
investigation regarding certification of eligibility to apply for ATAA.
    In order to apply the Department to issue a certification of 
eligibility to apply for ATAA, the subject worker group must be 
certified eligible to apply for TAA. Since the workers are denied 
eligibility to apply for TAA, they cannot be certified eligible to 
apply for ATAA.

Conclusion

    After careful review of the findings of the second remand 
investigation, I affirm the notice of negative determination of 
eligibility to apply for worker adjustment assistance for workers and 
former workers of Intel Corporation, Fab 23, Colorado Springs, 
Colorado.


[[Page 34048]]


    Signed at Washington, DC, this 6th day of June, 2008.
Elliott S. Kushner,
Certifying Officer, Division of Trade Adjustment Assistance.
 [FR Doc. E8-13402 Filed 6-13-08; 8:45 am]
BILLING CODE 4510-FN-P