Lawsuit of Korean Semiconductor D-RAM Subsidy

On December 15, the Ministry of Commerce, Industry and Energy(MOCIE) announced that International Trade Commission (ITC) made a preliminary decision of an industrial damage against Korean semiconductor D-RAM industries on December 13 (local time).

This preliminary decision was based on a determination of investigation beginning of the Ministry of Commerce after the lawsuit of Micron Technology, US on the first day of last month.

As Micron brought the lawsuit saying ‘Korean banks acquired debentures of Hynix rapidly because of the subsidy of the government, ITC made the preliminary decision which admitted the lawsuit contents of Micron affirmatively through voting of ITC members after having a hearing on December 13.

Determining whether the countervailing duties would be imposed on the Korean D-RAM semiconductor exported to US, the final decision will be made after next May.

However, when the Ministry of Commerce will make the preliminary decision and the subsidy rate against the subsidy payment of the Korean government next January, US can impose the deposits of countervailing duties and so will impose heavy burden on the Korean companies.

Hynix said in terms of the preliminary decision of ITC, “We already estimated the result of the preliminary decision. However, we will win the lawsuit in the final decision.

Hynix said, “The preliminary decision is to determine whether there is a reasonable base for the real investigation for very short term. Accordingly, there cannot be the advantageous decision for Micron. We will win the lawsuit in the final investigation by putting data of the semiconductor market status and positions of both companies submitted in the investigation phase.”

Samsung Electronics said, “Because we have never received the subsidy from the government, we don’t care about the result of the preliminary decision.”

Kim Gyeong-su, chief of semiconductor electronics section, MOCIE said, “The support of financial institutions was the decision of the financial institutions not the government subsidy. The damage of Micron owing to a decrease of the semiconductor price was from the market situation not related to the subsidy of the Korean government.”

Ja-Ryong Koo Joong-Hyun Park bonhong@donga.com sanjuck@donga.com