WTO decision goes against US
The World Trade Organisation (WTO) has decided against the US over an anti-dumping complaint put to it by the South Korean government.
South Korean officials claimed the US had imposed unreasonable anti-dumping duties on its products, an argument upheld by the WTO, and the US has now been forced to accept the organisation's arbitration.
The WTO established a dispute panel to adjudicate between the two countries, following the complaint made last August that South Korea had not been guilty of dumping memory chips. In that case, it argued, it was unreasonable for the US government to maintain its regulations and penalties.
The complaint also centres around a decision by the US Department of Commerce that the burden of proof for ending anti-dumping penalties should be on Korea. Attempts by both parties to solve the dispute had come to nothing, according to the South Korean government.
Despite the US government's efforts to block the assembly of an independant three-judge panel, US ambassador Rita Hayes was nevertheless forced to accept the arbitration last Friday.
Widespread suggestions that three Korean memory vendors had been put on a cash-with-order status by their DRam packaging suppliers were confirmed when a representative for LG Semicon said that it has not been able to obtain overseas credit. The company has had to pay cash for raw materials to its chip manufacturing process.
Indications are that the vast majority of semiconductor material suppliers will put chip makers on a cash-only transaction basis.
The banking crisis has left banks short of foreign currency, meaning they are unable to write letters of credit for the importation of chip materials such as processing chemicals and packaging epoxy. The crisis has been exacerbated by the sharp fall of the won against both the dollar and the yen.
In order to continue manufacturing, Korean firms are being forced to spend precious cash reserves at a time when their currency is at an all-time low. This dilemma could well have been the reason behind a drop in the market price of DRam recently.