Micron alleges South Korea giving Hynix advantage.Byline: The Register-Guard and wire services Micron Technology Micron Technology ("Micron") NYSE: MU is a multinational company based in Boise, Idaho, USA, best known for producing many forms of semiconductor devices. This includes DRAM, SDRAM, flash memory, and CMOS image sensing chips. , unable to buy rival Hynix Semiconductor, is once again launching a legal attack on the South Korean firm. After being rebuffed in its bid earlier this year to purchase parts of debt-laden Hynix, Boise-based Micron is renewing allegations that South Korea has subsidized sub·si·dize tr.v. sub·si·dized, sub·si·diz·ing, sub·si·diz·es 1. To assist or support with a subsidy. 2. To secure the assistance of by granting a subsidy. semiconductor manufacturers, including Hynix, which is now in the hands of its creditors, and Samsung Electronics Samsung Electronics (SEC, Hangul:삼성전자; KSE: 005930, KSE: 005935, LSE: SMSN, LSE: SMSD) is a South Korean multinational corporation and the world's largest and leading electronics and information technology company. , the world's largest producer of memory chips. Micron's chairman, Steven Appleton, said his company had filed a complaint with the Commerce Department and the U.S. International Trade Commission. It accuses the Seoul government of subsidizing manufacturers of dynamic random access memory Dynamic random access memory (DRAM) is a type of random access memory that stores each bit of data in a separate capacitor within an integrated circuit. Since real capacitors leak charge, the information eventually fades unless the capacitor charge is refreshed periodically. chips with bailouts and favorable loans, causing a flood on the world market. ``Inefficient manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. should not be allowed to escape normal market forces,'' Appleton maintained, adding that Seoul had violated its commitments to the World Trade Organization as well as laws in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The complaint asks for a countervailing duty Noun 1. countervailing duty - a duty imposed to offset subsidies by foreign governments tariff, duty - a government tax on imports or exports; "they signed a treaty to lower duties on trade between their countries" , one intended to balance the effect of imports that are subsidized or sold at artificially low prices. "We lost more than a billion dollars last year," Micron spokesman Sean Mahoney said. "That's how much injury has been caused." In the quarter ended Aug. 29, Micron reported a loss of $586.5 million on sales of $748 million. Micron last year had made a similar complaint against Hynix and the South Korean government, but didn't press it. South Korea vowed to contest the latest Micron move, which could have a bearing on the entire semiconductor industry. Prices of memory chips, while higher now than a year ago, are so low that manufacturers must sell them for less than it costs to produce them. Hynix has one memory chip plant in the United States - in west Eugene - and a half-dozen memory chip plants in South Korea. South Korea's commerce ministry, forming a task force to answer Micron's complaint, suggested that Micron was motivated in part by its failure to conclude a deal with Hynix last spring. Executives for both companies reached a tentative $3 billion agreement under which Hynix would have sold its semiconductor plants - including the Eugene factory - to Micron, but the Hynix board rejected the plan. Hynix creditors then converted bonds for equity in Hynix, giving them majority control, and appointed a new board. Hynix liabilities now total more than $6 billion, and creditors, led by the government-controlled Korea Exchange Bank Oehwan Bank or Korea Exchange Bank (KEB) (KSE: 004940) is South Korea's only exchange bank company. It is headquartered in Seoul, and was established in 1967. and Woori Bank Woori Bank (우리은행) is a bank headquartered in Seoul, Korea. The bank changed its name in 2002, and includes the former Commercial Bank of Korea, Hanil Bank, and Peace Bank. It was known from 1999 through 2002 as Hanvit Bank. , are resisting suggestions that they provide still more credit to keep the company afloat. Micron did not name either Samsung Electronics or Hynix in its complaint but charged that the government had in effect subsidized the semiconductor industry through the efforts of the company's lenders, citing decisions by the lenders to write off loans and to exchange debt for equity. Hynix denied the accusations, saying that creditors ``decided to arrange a debt rescheduling scheme on their own.'' It added that Micron's heavy losses were due to ``a market slump.'' Micron's Mahoney said it will take trade officials six to nine months to research Micron's complaint. |
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