Micron charges dumping of SRAMs by Taiwan, Korea

Electronic News, March 3, 1997 by Andrew MacLellan

Boise, Idaho--Self-appointed industry watchdog Micron Technology is again accusing overseas competitors of underselling commodity memory components, last week filing a petition in which it alleged Taiwan and South Korea are dumping static RAM (SRAM) chips onto the U.S. market.

The petition, filed with both the U.S. Department of Commerce and the International Trade Commission, does not name specific companies but charges that unfair trade practices are hurting an already embattled U.S. memory industry.

"The prices of SRAMs plunged throughout 1996 and into this year. The massive capacity build-up in Taiwan and Korea has resulted in significant oversupply in the SRAM market, prompting prices to tumble," said a Micron spokesperson.

"Taiwanese and Korean producers have increased their share of the U.S. market by underselling U.S.-based producers by significant margins. This has had a very negative impact on the financial results of U.S. SRAM companies. Moreover, additional planned capacity expansions in these countries threaten further serious harm to U.S. SRAM manufacturers." Micron, which would not elaborate on the charges contained in the 200-plus-page petition, has in the past called for an investigation of Japanese and South Korean companies which it claimed were selling dynamic RAM (DRAM) parts on the open market for less than they cost to manufacture. A petition filed with the Commerce department in 1985 accused Japan of dumping DRAM chips and resulted in an additional duty being levied for DRAM components imported into the U.S.

South Korean firms were assessed an anti-dumping duty under an order instituted in 1993, which Micron has asked be upheld during a subsequent series of administrative reviews. Korean memory vendors LG Semicon and Hyundai Electronics Industries were specifically named by Micron in a request for an expedited review filed with the Commerce Department last year (EN, May 3, 1996).

The latest petition is the first to implicate Taiwan, a sign, perhaps, that the country's semiconductor industry is now large enough to pose a threat to U.S. interests.

It is also the first filed by Micron to name SRAM semiconductors, which, like DRAM, have experienced a sharp decline in price during the last 18 months. The most notable example is 32-kilobit x 32-bit cache SRAM chips, prices for which have fallen from about $22 to as little as $2.50.

Micron currently makes fast synchronous 1M and 2M parts and has a 4M SRAM chip under development. According to market research company Dataquest, Micron in 1996 held a 1 percent share of the SRAM market and slipped from 15th place to 21st in the world market. Samsung, Hitachi and Toshiba share more than 37 percent of the SRAM market, with the largest U.S. supplier, Motorola, placing fifth.

Some of those companies which may be affected by the petition questioned Micron's motives.

Mark Ellsberry, marketing VP for Hyundai's Semiconductor division, observed that Micron had previously reduced its production of SRAM chips and may be trying to solidify pricing as a prelude to renewing its market presence.

"Frankly, it's a little bit humorous to see this, because in the time of shortage, Micron pulled out and put all of their eggs in the DRAM basket," he said.

A Micron spokesperson confirmed that as a percentage of sales, SRAM chips fell from representing 8 percent of the company's revenues in 1994 to just 2 percent last year.

Another of the companies named in past petitions said Micron is painting its complaint with too broad a brush, attacking markets that are addressed by only a few U.S. suppliers.

"They are in a totally different market as far as I know," said Arun Kamat, director of marketing for LG Semicon. "We are in the asynchronous slow SRAM market, where the U.S. market for that particular product family is extremely small."

"The SRAM market is so broad, so flat and there are so many manufacturers who make it, that no one company has the ability to affect one market," added Bruce Bonner, principal analyst for Dataquest. "Most of the SRAM manufacturers are overseas. Micron could in fact be trying to shore up its market position by firing a warning shot across the bow and letting the other vendors know that they should at least be thinking about their prices."

On the world stage, South Korea is trying to win a seat at the table with a U.S./Japan-sponsored global industry forum. According to the Semiconductor Industry Association (SIA), Micron's allegations will likely play no role in Korea's attempts to join the World Semiconductor Council, formed last year as part of the U.S.-Japan Joint Semiconductor Trade Agreement (EN, Aug. 5, 1996).

According to an SIA spokesperson, the group is more concerned with lifting import tariffs than with incidents of dumping, which the group will discourage through "social pressure." The first meeting of the world council is scheduled for April 11 in Hawaii, although it appears unlikely talks with Korea will conclude in time for them to join the inaugural caucus.