After an 8 months lasting investigation, officials at the European Commission have found Hynix Semiconductor guilty of receiving illegal aid from the Korean government via banks controlled by the country. In order to restrict Hynix, the Commission proposed duties of 30-35% on shipments of its DRAM chips to the European Union, the Financial Times reported on Friday.

Micron and Infineon companies filed countervailing duty cases with the U.S. Department of Commerce, the International Trade Commission and the European Commission last year. The complaint identifies multi-billion-dollar bailout packages and loan subsidies to Hynix and Samsung in violation of the U.S. Countervailing Duty laws and South Korea’s commitments under World Trade Organisation agreements. These subsidies have included loan write-offs, debt-for-equity swaps, government-induced debt financings and re-financings on non-commercial terms, special export financing and special tax treatment (see this, this, this and related news-stories for more details). The world's third largest memory chipmaker has racked up net losses of some $7.6 billion over the past three years and Micron voices the sum of $11.9 billion that was allegedly received by the semiconductor company as governmental aid. If there were no actions to save Hynix, it would have become bankrupt, according to accusers. Both companies also noted that competition with Hynix caused losses for the US and Germany DRAM makers.

The duties could be imposed after a preliminary decision by the EU, which is supposed to be made by no later than April 24, the Ministry of Foreign Affairs and Trade official said. A final ruling will be made by August 24, the official added, however, it is very likely that the final ruling will take effect on the 25^th of April. With 30 to 35% duties Hynix is unlikely to be able to ship its DRAM products to the European Union. It is not too dramatic though, since EU allocates only a not very significant part of Hynix’s sales, as very few PC vendors are based in Europe.

A big problem for Hynix is a similar ongoing probe in the United States. In case Hynix is unable to sell its memory in the USA, it will have a lot of chances to become bankrupt.

Hynix officials said that the company is not afraid about the legal disputes, as it will still be able to sell its memory via the Oregon facility as well as other Asian companies.