[Federal Register Volume 60, Number 175 (Monday, September 11, 1995)]
[Notices]
[Pages 47149-47152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-22501]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-812]
Dynamic Random Access Memory Semiconductors of One Megabit or
Above From the Republic of Korea; Preliminary Results of Antidumping
Duty Administrative Review
AGENCY: Import Administration/International Trade Administration/
Department of Commerce.
ACTION: Notice of Preliminary Results of Antidumping Duty
Administrative Review.
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SUMMARY: In response to requests from three respondents, one U.S.
producer, and several interested parties, the Department of Commerce
(the Department) has conducted an administrative review of the
antidumping duty order on dynamic random access memory semiconductors
of one megabit or above from the Republic of Korea. The review covers
three manufacturers/exporters of the subject merchandise to the United
States for the period of October 29, 1992 through April 30, 1994
We have preliminarily determined that sales have been made below
the foreign market value (FMV). If these preliminary results are
adopted in our final results of administrative review, we will instruct
U.S. Customs to assess antidumping duties equal to the difference
between the United States price (USP) and the FMV. Interested parties
are invited to comment on these preliminary results. Parties who submit
arguments in this proceeding are requested to submit with the argument
(1) a statement of the issue, and (2) a brief summary of the argument.
[[Page 47150]]
EFFECTIVE DATE: September 11, 1995.
FOR FURTHER INFORMATION CONTACT: Thomas F. Futtner, Office of
Antidumping Compliance, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue NW., Washington, DC 20230, telephone: (202) 482-
3814.
SUPPLEMENTARY INFORMATION:
Background
On May 10, 1993, the Department of Commerce published in the
Federal Register (58 FR 27520) the antidumping duty order on dynamic
random access memory semiconductors (DRAMS) from the Republic of Korea.
On May 4, 1994, the Department published (59 FR 23051) a notice of
``Opportunity to Request an Administrative Review'' of this antidumping
duty order for the period of October 29, 1992, through April 30, 1994.
We received timely requests for review from Hyundai Electronics
Industries, Co. (Hyundai), Goldstar Electron Co. (Goldstar), and
Samsung Electronics Co. (Samsung). The petitioner, Micron Technologies
Inc., requested an administrative review of these same three Korean
manufacturers of DRAMs. Two interested parties, PNY Electronics and
Pulsar Components International, Inc., requested a review of sixteen
Japanese resellers of Korean DRAMs. However, these two interested
parties subsequently withdrew their request. On June 15, 1994, the
Department initiated a review of the above Korean manufacturers (59 FR
30770). The period of review (POR) for all respondents was October 29,
1992, through April 30, 1994.
The Department is conducting this administrative review in
accordance with section 751(a) of the Tariff Act of 1930, as amended
(the Act). Unless otherwise indicated, all citations to the statute and
to the Department's regulations are in reference to the provisions as
they existed on December 31, 1994.
Scope of the Review
Imports covered by the review are shipments of DRAMs of one megabit
and above from the Republic of Korea (Korea). For purposes of this
review, DRAMs are all one megabit and above DRAMs, whether assembled or
unassembled. Assembled DRAMs include all package types. Unassembled
DRAMs include processed wafers, uncut die and cut die. Processed wafers
produced in Korea, but packaged, or assembled into memory modules in a
third country, are included in the scope; wafers produced in a third
country and assembled or packaged in Korea are not included in the
scope.
The scope of this review includes memory modules. A memory module
is a collection of DRAMs, the sole function of which is memory. Modules
include single in-line processing modules (SIPs), single in-line memory
modules (SIMMs), or other collections of DRAMs, whether unmounted or
mounted on a circuit board. Modules that contain other parts that are
needed to support the function of memory are covered. Only those
modules which contain additional items which alter the function of the
module to something other than memory, such as video graphics adapter
(VGA) boards and cards, are not included in the scope.
The scope of this review also includes video random access memory
semiconductors (VRAMs), as well as any future packaging and assembling
of DRAMs.
The scope of this review also includes removable memory modules
placed on motherboards, with or without a central processing unit
(CPU), unless the importer of motherboards certifies with the Customs
Service that neither it, nor a party related to it or under contract to
it, will remove the modules from the motherboards after importation.
The scope of this review does not include DRAMs or memory modules that
are reimported for repair or replacement.
The DRAMs subject to this review are classifiable under subheadings
8542.11.0001, 8542.11.0024, 8542.11.0026, and 8542.11.0034 of the
Harmonized Tariff Schedule of the United States (HTSUS). Also included
in the scope are those removable Korean DRAMs contained on or within
products classifiable under subheadings 8471.91.0000 and 8473.30.4000
of the HTSUS. Although the HTSUS subheadings are provided for
convenience and customs purposes, the written description of the scope
of this review remains dispositive.
United States Price
In calculating USP, the Department treated respondents' sales as
purchase price, as defined in section 772(b) of the Act, when the
merchandise was sold to unrelated U.S. purchasers prior to importation.
The Department treated respondents' sales as exporter's sale price
(ESP), as defined in section 772(c) of the Act, when the merchandise
was sold to unrelated U.S. purchasers after importation.
We calculated purchase price based on packed, f.o.b., f.c.a., or
c.i.f. prices to unrelated customers in the United States. We made
deductions, where appropriate, for foreign brokerage and handling,
foreign inland insurance, air freight, air insurance, U.S. duties, U.S.
commissions, discounts, and rebates in accordance with section
772(d)(2) of the Act.
We calculated ESP based on packed, ex-U.S. warehouse prices to
unrelated customers in the United States. We made deductions, where
appropriate, for discounts, rebates, foreign brokerage and handling,
foreign inland insurance, air freight, air insurance, U.S. duties,
credit expenses, warranty expenses, royalty payments, U.S. commissions,
advertising and promotion expenses, foreign banking charges, U.S.
subsidiary packing expenses and U.S. and Korean indirect selling
expenses, including inventory carrying costs in accordance with section
772(d)(2) of the Act. For both purchase price and ESP sales, we added
duty drawback, where applicable, pursuant to section 772(d)(1)(B) of
the Act.
We adjusted USP for taxes in accordance with our practice as
outlined in Siliconmanganese from Venezuela, Preliminary Determination
of Sales at Less-Than-Fair-Value (LTFV), 59 FR 31204 (June 17, 1994).
For DRAMs that were further manufactured into memory modules after
importation, we deducted all value added in the United States, pursuant
to section 772(e)(3) of the Act. The value added consists of the costs
of the materials, fabrication, and general expenses associated with the
portion of the merchandise further manufactured in the United States,
as well as a proportional amount of profit or loss attributable to the
value added. See, e.g., Notice of Final Determination of Sales at LTFV;
Certain Hot-Rolled Carbon Steel Flat Product, Certain Cold-Rolled
Carbon Steel Flat Product, Certain Corrosion-Resistant Carbon Steel
Flat Products and Certain Cut-to-Length Carbon Steel Plate from France,
58 FR 37125 (July 9, 1993). Profit or loss was calculated by deducting
from the sales price of the memory module all production and selling
costs incurred by the company for the memory module. The total profit
or loss was then allocated proportionately to all components of cost.
Only the profit or loss attributable to the valued added was deducted.
In determining the costs incurred to produce the memory module, we
included materials, fabrication, and general expenses, including
selling expenses and interest expenses. No other adjustments were
claimed or allowed.
Foreign Market Value
In order to determine whether there were sufficient sales of DRAMs
in the
[[Page 47151]]
home market to serve as a viable basis for calculating FMV, we compared
the volume of home market sales of DRAMs to the volume of third country
sales of DRAMs, in accordance with section 773(a)(1) of the Act. All
three respondents had viable home markets with respect to sales of
DRAMs made during the POR in accordance with 19 CFR 353.48(a). The
Department relied on monthly weighted-average home market prices in the
calculation of FMV.
Because Goldstar made some home market sales to related parties
during the POR, we tested these sales to ensure that, on average, the
related party sales were at arms length. To conduct this test, we
compared the gross unit prices of sales to related and unrelated
customers net of all movement charges, direct and indirect selling
expenses, valued-added tax and packing. See Final Determination of
Sales at LTFV; Certain Cold-Rolled Carbon Steel Flat Products from
Argentina, Appendix II, 58 FR 87062 (July 9, 1993). Based on the
results of that test, we discarded from Goldstar's home market database
all related party sales not made at arm's length. See Notice of Final
Determination of Sales at LTFV; Small Diameter Circular Seamless Carbon
and Alloy Steel, Standard, Line and Pressure Pipe from Brazil, 60 FR
31960, 31971 (June 19, 1995).
Because the Department found sales made at prices less than the
cost of production (COP) during the less than fair value (LTFV)
investigation, in accordance with our standard practice, we found
reasonable grounds to believe or suspect that all three respondents had
made sales at prices below the COP in the home market during the POR.
Thus in accordance with section 773(b) of the Act, we examined whether
the home market sales of each model were made at prices below their COP
in substantial quantities over an extended period of time, and whether
such sales were made at prices which would permit recovery of all costs
within a reasonable period of time in the normal course of trade.
We performed a model-specific COP test, in which we examined
whether each home market sale was priced below the merchandise's COP.
The Department defines COP as the sum of direct material, direct labor,
variable and fixed factory overhead, general expenses, and packaging
costs (19 CFR 353.51(c)(1994)). See Stainless Steel Hollow Products
from Sweden; Preliminary Results of Antidumping Duty Administrative
Review, 59 FR 40521 (August 9, 1994). For each model, we compared this
sum to the reported home market unit price, net of price adjustments
and movement expenses.
For each model where less than ten percent, by quantity, of the
home market sales during the POR were made at prices below the COP, we
included all sales of that model in the computation of FMV. For each
model where ten percent or more, but less than ninety percent, of the
home market sales during the POR were priced below the merchandise's
COP, we excluded from the calculation of FMV those home market sales
which were priced below the merchandise's COP, provided that these
below-cost sales were made over an extended period of time. For each
model where ninety percent or more of the home market sales during the
POR were priced below the COP and were made over an extended period of
time, we disregarded all sales of that model from our analysis. See
Brass Sheet and Strip from Canada: Preliminary Results of Antidumping
Duty Administrative Review, 60 FR 50670 (April 27, 1995).
In order to determine whether below-cost sales had been made over
an extended period of time, we compared the number of months in which
below-cost sales occurred for each product to the number of months
during the POR in which each model was sold. If a product was sold in
fewer than three months during the POR, we did not exclude the below-
cost sales unless there were below-cost sales in each month of sale. If
a product was sold in three or more months, we did not exclude the
below-cost sales unless there were below-cost sales in at least three
months during the POR. Id.
Finally, respondents did not provide any information, nor is there
any information on the record of this proceeding which indicates
recovery of all costs within a reasonable period of time for sales
found to have been made at prices below the cost of production.
Therefore, in accordance with our practice, we have disregarded
respondents' sales found to have been made at prices below the COP in
substantial quantities over an extended period of time, which would not
permit recovery of all costs within a reasonable period of time in the
normal course of trade.
We calculated the COP for the merchandise based on the sum of each
respondent's material costs, fabrication costs and general expenses in
accordance with section 353.51(c) of the Department's regulations (19
CFR 353.51(c) (1994)). We adjusted respondents' cost data as described
below:
For Hyundai, the Department relied on the submitted COP and
constructed value (CV) information, except in the following instances
where the costs were not appropriately quantified or valued:
1. We reclassified certain capitalized costs from R&D to current
costs of production. We recalculated R&D costs to reflect the current
costs incurred for all semiconductors.
2. We revised interest expense to reflect the proportional amount
incurred by the semiconductor business.
For Goldstar, the Department relied on the submitted COP and CV
information, except in the following instances where the costs were not
appropriately quantified or valued:
1. We recalculated R&D costs to reflect the current costs incurred
for all semiconductors.
For Samsung, the Department relied on the submitted COP and CV
information, except in the following instances where the costs were not
appropriately quantified or valued:
1. We recalculated R&D costs to reflect the current costs incurred
for all semiconductors.
2. We revised interest expense to reflect the proportional amount
incurred by the semiconductor business.
When all home market sales of a such or similar product in the
contemporaneous month (as identified in the July 19, 1994 model match
memorandum) were excluded from our analysis because the home market
sales were priced below the COP, or when no home market sales of such
or similar merchandise were found, then we used the CV of the
merchandise sold in the United States as the basis for FMV in
accordance with section 773(e) of the Act. We calculated the CV, in
accordance with section 773(e) of the Act, as the sum of the cost of
manufacture of the product sold in the United States, home market
selling, general and administrative (SG&A) expenses, and home market
profit. The cost of manufacture of the product sold in the United
States is the sum of direct material, direct labor, and variable and
fixed factory overhead expenses. For home market SG&A expenses, in
accordance with section 773(e)(B)(i) of our regulations, we used the
larger of the actual SG&A expenses reported by the respondents or ten
percent of the cost of manufacture, the statutory minimum for foreign
SG&A expenses. For home market profit, in accordance with section
773(e)(B)(ii) of our regulations, we used the larger of the actual
profit reported by the respondents or the statutory minimum of eight
percent of the sum of cost of manufacture and SG&A expenses. See
Polyethylene Terephthalate Film, Sheet, and Strip from the Republic of
Korea; Preliminary Results of Antidumping
[[Page 47152]]
Duty Administrative Review, 59 FR 35098, 35100 (July 8, 1994).
We calculated FMV based on delivered prices to unrelated customers
and, where appropriate, to related customers in the home market. In
calculating FMV, we made adjustments, where appropriate, for inland
freight, inland insurance, discounts, rebates, Korean brokerage and
handling charges, and home market credit expenses. We adjusted for
Korean consumption tax in accordance with our practice as outlined in
Siliconmanganese from Venezuela, Preliminary Determination of Sales at
LTFV, 59 FR 31204 (June 17, 1994). We deducted home market packing
costs from the home market price and added U.S. packing costs to the
FMV. We also made, where applicable, difference-in-merchandise
adjustments.
For comparison to purchase price sales, pursuant to 19 CFR 353.56,
we made circumstance-of-sale adjustments to the FMV, where appropriate,
for bank charges, royalty payments, and advertising. We made further
adjustments, where appropriate, for U.S. commissions and credit
expenses in accordance with 19 CFR 353.56(a)(2). Where commissions were
paid on U.S. sales and not paid on home market sales, we allowed an
offset to FMV amounting to the lesser of the weighted-average home
market indirect selling expenses, or the U.S. commissions in accordance
with 19 CFR 353.56(b) of our regulations.
For comparison to ESP sales, we made deductions, where appropriate,
for credit expenses, royalty payments, bank charges and advertising
expenses. We also allowed an ESP offset to the FMV, amounting to the
lesser of the weighted-average total of home market indirect selling
expenses, or he total U.S. indirect selling expenses plus commissions
in accordance with 19 CFR 353.56(b)(2).
No other adjustments were claimed or allowed.
Preliminary Results of the Review
As a result of this review, we preliminarily determine that the
following margins exist for the POR:
------------------------------------------------------------------------
Manufacturer/exporter Percent margin
------------------------------------------------------------------------
Hyundai Electronics Co., Ltd............. 0.202
(de minimis)
Samsung Electronics Co., Ltd............. 0.9936
(de minimis)
Goldstar Electron Co., Ltd............... 0.319
(de minimis)
------------------------------------------------------------------------
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between the USP and the FMV may vary from the percentages
stated above. Upon completion of the review the Department will issue
appraisement instructions on each exporter directly to the U.S. Customs
Service.
Furthermore, the following deposit requirements will be effective
for all shipments of dynamic random access memory semiconductors of one
megabit and above, assembled or unassembled, entered, or withdrawn from
warehouse, for consumption on or after the publication date of the
final results of this administrative review, as provided by section
751(a)(1) of the Act.
(1) The cash deposit rate for the reviewed companies will be those
rate established in the preliminary results of this review (except that
no deposit will be required for firms with zero or de minimis margins;
i.e., margins less than 0.5%);
(2) For previously reviewed or investigated companies not listed
above, the cash deposit rate will continue to be the company-specific
rate published for the most recent period;
(3) If the exporter is not a firm covered in this review or in the
original LTFV investigation, but the manufacturer is, the cash deposit
rate will be the rate established for the most recent period for the
manufacturer of the merchandise; and
(4) If neither the exporter nor the manufacturer is a firm covered
in this or any previous review conducted by the Department, the cash
deposit rates will be 3.85%, the ``all other'' rate established in the
LTFV investigation.
These deposit requirements shall remain in effect until publication
of the final results of the next administrative review.
Interested parties may request disclosure within five days of the
date of publication of this notice, and may request a hearing within
ten days of the date of publication. Any hearing, if requested, will be
held as early as convenient for the parties but not later than 44 days
after the date of publication or the first work day thereafter. Case
briefs or other written comments from interested parties may be
submitted not later than 30 days after the date of publication of this
notice. Rebuttal briefs and rebuttal comments, limited to issues in the
case briefs, may be filed not later than 37 days after the date of
publication. The Department will publish the final results of this
administrative review, including the results of its analysis of issues
raised in any such written comments.
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 353.26 to file a certificate regarding the
reimbursement of antidumping duties prior to liquidation of the
relevant entries during this review period. Failure to comply with this
requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This administrative review and notice are in accordance with
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR
353.22.
Dated: August 16, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-22501 Filed 9-8-95; 8:45 am]
BILLING CODE 3510-05-M