Dynamic Random Access Memory Semiconductors of One Megabit or Above From the Republic of Korea; Notice of Amended Final Results Pursuant to Court Decision, 66501-66502 [E6-19292]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 71, Number 220 (Wednesday, November 15, 2006)]
[Notices]
[Pages 66501-66502]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-19292]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

(A-580-812)


Dynamic Random Access Memory Semiconductors of One Megabit or 
Above From the Republic of Korea; Notice of Amended Final Results 
Pursuant to Court Decision

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: On July 31, 2006, the United States Court of International 
Trade (CIT) sustained the final remand redetermination made by the 
Department of Commerce (the Department) pursuant to the CIT's third 
remand of the final results of the May 1, 1999--December 31, 1999 
administrative review of dynamic random access memory semiconductors of 
one megabit or above (DRAMs) from the Republic of Korea (Korea). See 
Hynix Semiconductor, Inc., Hynix Semiconductor America, Inc. v. United 
States and Micron Technology, Inc., 442 F. Supp. 2d 1359 (Ct. Int'l 
Trade 2006) (Hynix IV). Because all litigation in this matter has now 
concluded, the Department is now issuing its amended final results in 
accordance with the CIT's decision.

EFFECTIVE DATE: November 15, 2006.

FOR FURTHER INFORMATION CONTACT: Maisha Cryor or Mark Manning, AD/CVD 
Operations, Office 4, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Ave., NW, Washington, DC 20230; telephone: (202) 482-6320 
or 482-3814, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On October 12, 2001, the Department published a notice of final 
results of the antidumping duty administrative review of DRAMs from 
Korea covering the period May 1, 1999 through December 31, 1999. See 
Dynamic Random Access Memory Semiconductors of One Megabit or Above 
From the Republic of Korea: Final Results of Antidumping Duty 
Administrative Review, 66 FR 52097 (October 12, 2001) (Final Results). 
Subsequently, Hynix Semiconductor, Inc. (Hynix) filed suit at the CIT 
contesting the Final Results.
    In these Final Results, the Department stated that: (1) ''. . .as a 
result of the continually changing methodology we found that the 
reduced R&D costs recognized by Hyundai and LG Semicon Co. Ltd. 
(LG),\1\ through the amortization and deferral of their R&D expenses, 
and resulting allocation of R&D expenses to merchandise, does not 
reasonably reflect the cost of producing the subject merchandise.'' See 
Final Results and accompanying Decision Memorandum at Comment 2; (2) 
''. . .we have continued to allocate all semiconductor R&D expenses 
over the total semiconductor cost of goods sold, a methodology which 
does not overstate costs, but which we believe reasonably and 
accurately identifies the R&D expenses attributable to subject 
merchandise.'' See Final Results and accompanying Decision Memorandum 
at Comment 3; and (3) `` {w{time}  e also based depreciation. . . on 
the pre-1998 useful lives employed by Hyundai because. . .we believe 
that the useful lives adopted in 1999, and the resulting depreciation, 
are distortive.'' See Final Results and accompanying Decision 
Memorandum at Comment 5.
---------------------------------------------------------------------------

    \1\ After the Fifth Administrative Review was completed, 
respondent Hyundai acquired LG. Subsequent to the acquisition, the 
name of the combined company was changed to Hynix Semiconductor, 
Inc.
---------------------------------------------------------------------------

    In January 2003, the CIT remanded the Department's Final Results in 
Hynix Semiconductor, Inc., Hynix Semiconductor America., Inc. v. United 
States and Micron Technology, Inc., No. 01-00988, Slip Op. 03-13 (Ct. 
Int'l Trade 2003) (Hynix I). In Hynix I, the CIT ordered the Department 
to: (1) reconsider and further explain why the use of Hynix's amortized 
R&D costs would not reasonably reflect Hynix's actual R&D expenses for 
this period of review, and to identify what distortions, if any, would 
arise in the cost of production (COP) calculation if amortized R&D 
costs were used; and to reconsider and address Hynix's assertion that 
all 1996 R&D costs that should have been carried forward into this 
period of review, if amortized, were fully taken into account prior to 
or within the Fifth Administrative Review, when the Department used 
expensed R&D costs in the COP calculation; (2) reconsider and further 
explain why Hynix's deferral of certain R&D costs does not reasonably 
reflect the R&D costs related to the subject merchandise; (3) further 
explain whether the subject merchandise has benefitted from R&D 
activities for non-memory products and identify substantial evidence in 
the record to justify this conclusion; and (4) explain how the revised 
average useful lives (AULs) reported by Hynix are not standard industry 
practice; how and where in the record Hynix's reported AULs were 
overstated; and whether the use of Hynix's reported AULs would not 
reasonably reflect depreciation in the COP. See Hynix I at 2-3.
    In the Department's first redetermination on remand, Final Results 
of Redetermination Pursuant to Court Remand; Hynix Semiconductor, Inc., 
Hynix Semiconductor America., Inc. v. United States and Micron 
Technology, Inc. (June 6, 2003) (Remand Results), the Department, as 
ordered by the CIT, fully explained, and supported with substantial 
evidence, its positions regarding Hynix's R&D costs and AULs. As a 
result, the Department reached the same conclusions it reached in the 
Final Results, namely that: (1) Hynix's amortization of its R&D costs 
does not reasonably reflect Hynix's actual R&D expenses for this period 
of review; (2) Hynix's deferral of certain R&D costs does not 
reasonably reflect the R&D costs related to the subject merchandise; 
(3) Hynix's production of subject merchandise has benefitted from R&D 
activities for non-memory products; and (4) the use of Hynix's reported 
AULs does not reasonably reflect the cost of production.
    On November 23, 2003, the CIT remanded the Department's Remand 
Results. See Hynix Semiconductor, Inc., Hynix Semiconductor America., 
Inc. v. United States and Micron Technology, Inc., No. 01-00988, Slip 
Op. 03-152 (Ct. Int'l Trade 2003) (Hynix II). Specifically, the CIT 
sustained the Department's findings that Hynix's indefinite deferral of 
certain R&D expenses does not accurately reflect Hynix's cost of 
producing the subject merchandise for this period of review. See Hynix 
II at 9. In Hynix II, however, the CIT again remanded the Department's 
findings regarding Hynix's amortization of R&D costs, cross-
fertilization and AULs.
    On December 12, 2003, the petitioner submitted comments on the 
CIT's findings in Hynix II. Specifically, the

[[Page 66502]]

petitioner addressed each of the remanded issues and suggested that the 
Department reopen the administrative record and send a questionnaire to 
Hynix concerning these issues. The Department declined to reopen the 
administrative record for further information given the CIT's findings 
in Hynix II and the specific directions contained in the CIT's remand 
order of November 24, 2003.
    In its Final Results of Redetermination Pursuant to Court Remand: 
Hynix Semiconductor, Inc, Hynix Semiconductor America, Inc. v. the 
United States and Micron Technology, Inc. (Court No. 01-00988) 
(December 17, 2003) (Final Results of Remand), the Department, unable 
to provide further support, recalculated Hynix's R&D costs to exclude 
R&D costs for non-subject merchandise; recalculated Hynix's R&D costs 
to allow for amortization, and; recalculated Hynix's AULs to allow for 
its reported accounting adjustment. The CIT affirmed the Department's 
final results of redetermination in their entirety and the case was 
dismissed. See Hynix Semiconductor, Inc., v. United States, 318 F. 
Supp. 2d 1314 (Ct. Int'l Trade 2004) (Hynix III).
    In Hynix III, the CIT noted that Micron had pointed out a possible 
clerical error in the calculation of the assessment rate. The CIT 
stated that it had found no indication that Micron had brought this 
clerical error to the Department's attention prior to filing comments 
to the Final Results of Remand. Further, the CIT stated that the 
Department had made no mention of the clerical error in the Final 
Results of Remand and that Hynix had not mentioned the clerical error 
in their comments to the Final Results of Remand. However, the CIT 
noted that Micron had notified the Department of this error three days 
after the Department had issued the Final Results in October 2001. The 
Department agreed with Micron and corrected the error, noting that 
correction of the error ``would have no impact on the dumping margin 
and would not require publication of amended final results.'' The CIT 
declined to address this issue but left it to the Department to 
determine whether there was a clerical error, as alleged by Micron, and 
to correct that error as it deemed appropriate. On April 19, 2004, 
consistent with the decision of the U.S. Court of Appeals for the 
Federal Circuit, in Timken Co. v. United States, 893 F. 2d 337 (Fed. 
Cir. 1990), the Department notified the public that the CIT's decision 
was ``not in harmony'' with the Department's Final Results. See Dynamic 
Random Access Memory Semiconductors of One Megabit or Above From the 
Republic of Korea: Notice of Court Decision and Suspension of 
Liquidation, 69 FR 20856 (April 19, 2004).
    Subsequent to the Hynix III decision, Hynix appealed the CIT's 
decisions to the Court of Appeals for the Federal Circuit (Federal 
Circuit) and Micron cross-appealed. On appeal, the Federal Circuit 
affirmed the use of Hynix's product-specific R&D expenses and the 
disallowance of the indefinite deferral of certain R&D. The Federal 
Circuit reversed the CIT's decision requiring the Department to accept 
Hynix's amortized R&D expenses and remanded the case to the CIT with 
instructions to remand the case to the Department to recalculate 
Hynix's weighted-average antidumping duty by expensing Hynix's R&D 
costs as in the Final Results. See Hynix Semiconductor, Inc. v. United 
States, 424 F 3d 1363 (Fed. Cir. 2005) (Hynix Semiconductor) at 1369-
1373.
    Upon consideration of the decision by the Federal Circuit in Hynix 
Semiconductor, the CIT ordered that the Final Results of Remand be 
remanded to the Department. In its remand, the CIT instructed the 
Department to recalculate Hynix's weighted-average antidumping duty by 
expensing R&D cost in a manner consistent with the decision by the 
Federal Circuit.
    On March 31, 2006, the Department issued its Final Results of 
Redetermination Pursuant to Court Remand; Hynix Semiconductor, Inc., 
Hynix Semiconductor America, Inc., v. United States and Micron 
Technology, Inc. (Final Results of Remand II). In the Final Results of 
Remand II, the Department recalculated Hynix's weighted-average 
antidumping duty by expensing R&D costs in accordance with the decision 
by the Federal Circuit.
    On July 31, 2006, the CIT found that the Department complied with 
the CIT's remand order in Hynix III and sustained the Department's 
Final Results of Remand II. See Hynix IV, 442 F. Supp. 2d 1359 (Ct. 
Int'l Trade 2006). We are issuing these amended final results to 
reflect the results of the remand determination because no party has 
further appealed and there is now a final and conclusive decision in 
the court proceeding.

Amended Final Results of Review

    We are amending the final results of the May 1, 1999--December 31, 
1999 administrative review of the antidumping duty order on DRAMs from 
Korea. The weighted-average antidumping duty for Hynix is 2.70 percent.
    In sum, these amended final results of review differ from the Final 
Results in that, pursuant to instructions from the CIT, the Department 
calculated Hynix's R&D expenses based upon product-specific costs and 
used Hynix's reported AULs. See Hynix III; see also Hynix IV.

Assessment

    The Department shall determine, and the U.S. Customs and Border 
Protection (CBP) shall assess, antidumping duties on all appropriate 
entries. In accordance with section 351.212(b)(1) of the Department's 
regulations, we have calculated importer-specific assessment rates by 
dividing the dumping margins found on the subject merchandise examined 
by the estimated entered value of such merchandise. Where the importer-
specific assessment rates are above de minimis, we will instruct CBP to 
assess antidumping duties on that importer's entries of subject 
merchandise. The Department intends to issue assessment instructions to 
CBP 15 days after the date of publication of these amended final 
results of review.
    These amended final results of administrative review are issued and 
published in accordance with section 516A(c)(1) of the Act.

    Dated: November 6, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E6-19292 Filed 11-14-06; 8:45 am]
BILLING CODE 3510-DS-S