EC hits Hynix with 33 percent punitive duty

The European Commission Thursday slapped 33 percent duties on imports of DRAM (dynamic RAM) made by the South Korean firm Hynix Semiconductor Inc.

This is the largest such punishment the Commission has ever meted out to one company, and has sparked opposition from Hynix's customers in Europe and some European member states, according to sources close to the Commission.

The move follows a lengthy investigation into South Korean government support for Hynix. Hynix has been found to benefit from subsidies in the form of financing, provided by government-owned or controlled Korean banks, to the detriment of the European chip industry, the Commission said in a statement.

The European regulator said subsidies to rival South Korean chip maker Samsung Electronics Co. Ltd. were found to be within the limits allowed by law, and Samsung will therefore not be affected by any punitive duties.

European chip makers, including Germany's Infineon Technologies AG, have complained about restructuring loans and debt-for-equity swaps made by South Korea's state-controlled banks to Hynix, arguing that this sort of financial support amounts to illegal state aid and allows Hynix to offer chips at prices below the cost of production.

Infineon claims that Hynix has been able to sell DRAM chips at below the production price of around US$4 per chip.

The Commission agreed. "The sales prices of DRAMS fell dramatically in the period investigated," it said.

It argues that Hynix had distorted competition in the European market, which was worth around €2 billion in 2001, the year the firm was under investigation.

The Commission identified two types of financial assistance: the refinancing of corporate bonds provided through a program set up by the South Korean government together with the Korean Development Bank; and financing from a handful of banks, including Korea Exchange Bank, Korea Development Bank, Hanvit Bank and Chohung Bank, which together account for about 60 percent of HynixÂ’s debt.

The 33 percent duty on Hynix’s DRAMS will apply for four months, the Commission said. "During this period the Commission will have to take a definitive decision," it said.

The U.S. has also punished Hynix for having received state help with a provisional import duty of 57.37 percent on the firm’s DRAMS. Taiwan is also understood to be concerned about the support Hynix receives and is considering opening its own investigation.

A lawyer close to Hynix who requested anonymity said the company opposed the EU action and would try to persuade the 15 member state governments to scrap the import charge.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Paul Meller

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?