US investigates South Korean DRAM chip makers

US investigates South Korean DRAM chip makers

The US Department of Commerce (DOC) is investigating a claim by Micron Technology that the South Korean government has paid subsidies to two of its larger semiconductor companies, Hynix Semiconductor and Samsung Electronics.

Micron Technology filed a complaint with the DOC on November 1, and the department will look into levying tariffs on imports to the US of South Korean DRAM products, it said in a fact sheet posted at the Web site of the International Trade Administration. A decision from the DOC is expected by April 10, 2003.

The European Union is also investigating charges levied by German chip maker Infineon Technologies against the two companies of unfair subsidies from the South Korean Government.

All four companies make DRAM chips, which are used as the main memory in most of the world's PCs. Critics are charging that the South Korean Government made a series of low-interest loans to the companies in order to prop up their balance sheets, when the companies had received junk-bond ratings from credit agencies.

The loans and other subsidies total US$7 billion for Hynix alone, according to a lawyer representing Infineon in the EU investigation.

The US Department of Justice launched a separate investigation into allegations of price-fixing and collusion among DRAM manufacturers earlier this year.

Hynix has struggled under the weight of long-term debt, volatile DRAM pricing, and spotty demand for PCs with their memory chips, while fellow South Korean company Samsung dominates the market for memory with a diversified product line.

Samsung led the DRAM market in terms of revenue in 2001 with 28.7 per cent market share, according to numbers from IDC. Micron was second with 19.8 per cent, and Hynix and Infineon trailed with 15.2 per cent and 10.8 per cent, respectively.

Hynix's board of directors rejected an offer from Micron to buy the South Korean company's memory business in April, citing the reduced value of the deal due to Micron's falling stock price.

Follow Us

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments