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Japan to lift tariff on S. Korean chips

A three-year trade quarrel between Japan and South Korea came to a close yesterday when Tokyo said it would end a punitive import duty on computer chips from Hynix Semiconductor Inc.

Japan's Ministry of Economy, Trade and Industry said it will lift the 9.1-percent tariff on April 23, pending Cabinet approval later this week.

Japan began imposing a 27.2-percent duty on Hynix DRAM, or dynamic random access memory, chips in January 2006 because of South Korean government support for Hynix when it nearly collapsed under debt twice this decade. Japan, along with the United States and the European Union, accused South Korea of enabling Hynix to sell memory chips at unfairly low prices.

The levy was lowered to 9.1 percent in September after pressure from the World Trade Organization.

Both the US and the EU have dropped their Hynix tariffs, and South Korea had been urging the WTO to demand Japan to also scrap the import charge.

A government panel decided yesterday that Hynix is no longer benefiting from government aid or receiving any other state support, the ministry said.

Hynix, the world's second-largest manufacturer of computer memory chips, produces both NAND flash and DRAM chips. NAND chips are used in digital devices such as music players and cameras, while DRAMs are used mostly in personal computers.

The latest move by Tokyo could help bolster struggling Icheon-based Hynix. Its fourth quarter net loss more than doubled amid falling prices and weakness in the South Korean won.

Share to rise

"We welcome the decision," said Hynix spokeswoman Park Seong-ae.

Hynix held a 15.4-percent share of Japan's DRAM market last year but now expects the figure to "go up significantly," she said.

The company has racked up five straight quarters of red ink amid a long price slump in the semiconductor industry that has also hit rivals such as Samsung Electronics Co and Japan's Elpida Memory Inc. German memory-chip maker Qimonda AG declared bankruptcy earlier this year.

Hynix shares fell 0.7 percent to 13,400 won (US$10.19) yesterday.



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