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24 Mar 2006
The European Union (EU) is about to embark on a controversial review of the punitive tax currently in place against Korean memory giant Hynix.
Goods from Hynix have been subject to tariffs of almost 35 per cent since 2003, when it was ruled that Hynix was being unfairly subsidised with billions of dollars from the Korean government. The tariffs were brought in to punish Hynix and protect the prices of DRam products produced by other memory manufacturers, such as Infineon and Micron Europe. The US also imposed a similar tariff, but Hynix has continued to thrive as a DRam supplier and is now the second largest in the world.
The review being proposed by the EU will decide whether the tariff should be increased or decreased.
The EU said in a statement: “The commission has received information from Hynix. Here it is argued that the effects of the subsidies, which were found to be available in the investigation that led to the imposition of measures, have ceased to exist.
“On the other hand, the commission received information from the community producers, Infineon Technologies and Micron Europe. They argued that, at its present level, the existing measures on imports of the product under review from Hynix is no longer sufficient to counteract the subsidisation, which is causing injury [to the DRam market].”
Since the imposition of the tariffs, Hynix products have been scarce in the UK channel, but any reduction could change that.
Les Billing, managing director of Microtronica, said: “That tax didn’t stop Hynix increasing sales elsewhere. However, we see Hynix products only very occasionally now, usually at very low prices. If the EU changes the tax it’s possible we might see more of it, but if Hynix is still being helped by its government it has an unfair advantage over other DRam makers.”
Hynix is still courting controversy elsewhere. Four of its employees admitted guilt in a US court recently in relation to market price fixing.
All four will serve prison sentences and must pay fines totalling $1m.
Last year, Samsung agreed to pay $300m for its part in the affair, with Hynix, Infineon and Elpida having settled for a total $429m in penalties.
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