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Japan to consider tariffs on Hynix Dram chips

The Japanese government has launched an investigation into whether to slap punitive tariffs on memory chips produced by South Korea's Hynix Semiconductor.

Plans for the investigation were outlined by the Ministry of Finance and Ministry of Economy, Trade and Industry (METI) and follow the filing in mid-June of a petition by two of Hynix's competitors, Elpida Memory and Micron Japan.

The two companies are unhappy about money supplied to Hynix by the South Korean government. Hynix and the government contend the money was for restructuring the deeply indebted company, however its competitors say it amounts to government subsidies, which are illegal under World Trade Organisation rules.

Elpida and Micron requested in their petition that tariffs be levied on imports into Japan of Drams and memory modules manufactured in South Korea by Hynix and any other company which purchases Hynix Dram and then exports that product to Japan.

The decision by the Japanese government to launch an investigation came as no surprise to Hynix, said James Kim, head of the company's investor relations unit. The company has already begun preparing to fight the allegations, he said. On the issue of the money provided to Hynix, he said, "The bankers provided that support based upon pure commercial judgement. We do not think this is illegal or improper."

In June when the original petition was filed, Hynix issued a strongly worded statement that called it "unreasonable and unwarranted" and said any investigation "completely defies common sense". It also said, "The only reason behind this petition is for Japanese producers to expand illegitimately their market shares by harassing Hynix and the Korean Dram industry."

The US and European Union have already imposed tariffs on Hynix Dram chips over the same issue.

Martyn Williams writes for IDG News Service

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