Japan to Levy 27% Punitive Duties on DRAM From S. Korea

By Kyodo News International, Tokyo

Jan. 20–TOKYO — The government plans to levy a 27.2 percent import duty on computer chips made by Hynix Semiconductor Inc. of South Korea, government sources said Friday, in Japan’s first such move that might further strain already tense bilateral relations.

In its response, South Korea voiced “strong regret” over Japan’s move to invoke the countervailing tariff on DRAMs made by the chip maker, suggesting it may refer the dispute to the World Trade Organization for settlement.

The Japanese Cabinet will finalize the retaliatory measure as early as next Friday and will take effect the same day, the sources said. The duty will last for up to five years.

The relations between the two East Asian neighbors remain strained amid fierce criticism by South Korea over repeated visits by Japanese Prime Minister Junichiro Koizumi to Tokyo’s war-related Yasukuni Shrine and other developments Seoul sees as glossing over Japan’s militarist past.

Since August last year, Japan has been investigating whether to slap the punitive tariffs on Hynix-made dynamic random access memory microchips due to complaints from Japanese chipmakers that imports from the South Korean maker were priced unfairly low, damaging the Japanese industry.

Japanese chipmaker Elpida Memory Inc. filed such a complaint, claiming Hynix exports were financed by unfair loans from a bank backed by the South Korean government. Major Japanese electronics makers Hitachi Ltd. and NEC Corp. are among leading stakeholders in Elpida.

Tokyo earlier reached the view in October that the planned punitive action is appropriate. But the decision to impose the punitive tariffs was pending as the Japanese government had called on the South Korean government to submit a reply to its latest notice by Nov. 21.

In 2003, the U.S. government and the European Union slapped import duties of about 44 percent and 34 percent, respectively, on Hynix-made DRAMs, ruling that they were unfairly subsidized by the South Korean government.

South Korea later filed a complaint with a WTO panel for a dispute settlement and won. However, a higher panel overruled the decision and supported U.S. claims in June.

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