Korean DRAM makers control a very substantial part of the world’s DRAM market and that fact definitely does not give the planet’s third largest memory manufacturer Micron Technology to stay calm. A year ago the company made a lot of efforts in order to lower the prices on memory and buy Hynix Semiconductor afterwards, when the latter was in critical financial condition. They did not succeeded in buying Hynix since the management board of the South Korean-based memory manufacturer refused to sell the company to Boise, Idaho-based Micron. Generally speaking, Micron lost money on their dumping, but without any success, since both Korean DRAM manufacturers are often provided financial help when they need it from the South Korean Government or its affiliates, according to Micron.

Today Micron Technology filed a countervailing duty (CVD) case with the U.S. Department of Commerce and the International Trade Commission against DRAM semiconductor products manufactured in South Korea. The complaint identifies multi-billion-dollar bailout packages and loan subsidies to South Korean semiconductor companies in violation of 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.

Micron’s CEO and President, Steve Appleton, stated, that the ongoing subsidisation of Korean DRAM manufacturers violated free market principles and had resulted in excess supply in the international market for DRAM products. He added that inefficient manufacturing operations should not be allowed to escape normal market forces. According to Mr. Appleton, Korea had not kept its commitments to the World Trade Organisation and continued to violate U.S. Countervailing Duty laws.

According to Micron’s complaint, subsidies benefiting South Korean semiconductor manufacturers have caused economic injury to Micron and other DRAM producers. The filing seeks imposition of a countervailing duty against Korean DRAM imports. The case will proceed simultaneously.

In case Micron wins this case, the biggest South Korean memory makers will not be able to sell the memory abroad. Although this final is very unlikely, we can easily imagine that the memory prices will skyrocket if it happens.

See also:

- Hynix: Between Samsung and Micron
- Micron Reports Financial Results for the Fourth Quarter and Fiscal 2002
- Samsung Shared its Expansion Plans. 33% of DRAM Market by the End of the Year