WTO upholds US tariffs in Hynix DRAM case

WTO reverses earlier DRAM decision, upholding U.S. tariffs against Hynix chips made in South Korea.

The World Trade Organization (WTO) has reversed an earlier ruling and upheld US duties on DRAM (dynamic RAM) chips made in South Korea by Hynix Semiconductor.

The decision by the WTO appellate body paves the way for the US to continue collecting a 44-percent tariff on computer memory chips made in South Korea by Hynix, and could put to rest a three-year trade dispute between the US and South Korean governments.

Hynix has "no way to appeal the decision," said Kim Ahyoung, a spokeswoman for the company.

"The result is unexpected, but we don't think that it will affect our business," she added.

Computer users should see little impact from the ruling, since Hynix has operated under the tariffs for nearly two years. The duty does not apply to Hynix chips made outside of South Korea, and the company's Oregon plant has been filling most of its US orders.

The US enacted the duties in retaliation for multi-billion dollar restructuring loans given to Hynix by some of South Korea's state-controlled banks at the height of a downturn in the memory chip market.

The appellate body found that the original WTO dispute settlement panel "failed to apply the proper standard of review," including errors in declining to consider certain evidence as well as failing to examine the US government's evidence against Hynix in its totality, according to the group's report on the case.

The panel had previously ruled in favor of Seoul and concluded that the US tariffs violated international trade rules.

Micron Technology, the world's second largest DRAM maker by revenue and the company that raised the initial complaint against Hynix with US officials, said it was gratified by the decision.

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Dan Nystedt

IDG News Service
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