Articles: Memory

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However fantastic it seems, the unshakable Hynix once again remained the hero of the month. A few years ago the competitors tried to suffocate Hynix with dumping, but the company lived it through, although came out of that predicament in no best condition. Then there was that long epic with selling itself to someone (there were others, besides Micron, involved). And now we are ready for the third act of this drama called “Let’s make it bankrupt”. And those who are concerned make it easy: they just don’t allow Hynix to sell its own produce.

On the whole, nearly all memory makers are very eager to accuse each other of dumping. They just like the process. The USA, Taiwan, Japan, Korea – they all introduce protective duties against each other. That’s an all-out war, and there is no peace looming ahead. When Hynix is dead they will find someone else. So far, the Koreans were under attack, mostly Hynix. It’s quite simple: even if Samsung receives the financial governmental support it would be hard to prove it (and judging by the financial results, Samsung doesn’t actually need it).

Hynix is another story. The state of its financial affairs made it call for state support openly. The negotiations with Micron when the company documentation had to be opened up didn’t help to maintain confidentiality, either. The competition in this field is fierce and we would be surprised if no one seized this opportunity. The accusers are quite right, in fact: if state banks didn’t write off Hynix’ debts and make new loans (which they wouldn’t do without a pressure from their main stock-holder), the company wouldn’t sell chips at such a low price as it does.

Subsides and dumping are easy to prove, so we shouldn’t wonder at the outcome. The several-months-long suit that had been progressing in two courts simultaneously ended abruptly in April. First, at the beginning of the month, the US Department of Commerce agreed to introduce 57.37 protective duties against Hynix’s products on the territory of the United States. This is the biggest PC memory marketplace and any company would feel bad about leaving it.

Fortunately for Hynix, it had prepared an escape way. Protective duties are taken at the customs and don’t work inside the country. If any of the locals is into dumping, it’s anti-monopoly organizations’ concern. And the Federal Trade Commission has no grudge against Hynix’ fab in Oregon. Although Hynix’ investors wanted to sell this fab, company heads didn’t listen to them and even put about $100 million into equipping it for production of 0.13micron 256Mbit DRAM chips.

So, Hynix has every chance to linger in the USA for some more time and even rake in some profit. Also, before the final court decision, Hynix brought into America quite a bit of its produce. And of course, there are ways to bypass the protective duties. Hynix assures that they will be able to get into the country about 80% of the currently shipped chips without paying the duties. The Oregon fab will make up for the remaining 20%.

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