Don't renew the semiconductor cartel

Article Abstract:

The Bush administration prepares to renew the US-Japan semiconductor agreement, an experiment in managed trade that expires in Jul 1991. The semiconductor agreement was initiated in 1986 in response to decline of the memory chip portion of the US semiconductor industry. US makers of the devices, which enable computers to store and retrieve data and software, lost market share to Japanese competition in the early 1980s. In particular, the US was routed out of the Dynamic Random Access Memory chips (DRAMs) sector. US merchant producers, who had claimed 100 percent of the US market in 1976, barely claimed 5 percent of the market in 1986. Japan's success in the semiconductor market emerged from lower costs derived through superior manufacturing processes and from many leading chip makers that use the chips themselves. The agreement signed in 1986 was engineered to strictly control trade within the semiconductor industry. The agreement wreaked havoc on the industry instead of restoring order.

Japan, Integrated circuits, Industry regulations, International competition (Economics), Government regulation of business, Trade regulation, Government Regulation, Japanese Competition, International Trade, Cooperative Agreements, Semiconductor Industry

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Dumping case against semiconductors from South Korea holds list of lessons

Article Abstract:

The fight over the alleged 'dumping' of dynamic random access memories (DRAMs) on the US market by South Korean manufacturers has valuable lessons. South Korean chip makers are now second in the large US DRAM market to the Japanese. In 1992, Micron Technology Inc filed a dumping complaint with the US Commerce Dept, charging that the South Korean chip makers charged unfairly low prices for their wares, as defined by US law. DRAM prices have climbed about 20 percent since Micron filed the complaint. But because US firms cannot satisfy the demand for DRAMs, Japanese firms will benefit the most if special duties are place on the South Korean chips. US computer makers, which buy DRAMs, have sided with the Korean chip makers and asked Commerce Secretary Ron Brown to suspend the extra duties. Many trade executives, lawyers and economists want trade laws rewritten so that broader economic interests are protected in trade cases.

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U.S. duties on Korean semiconductors raise double-edged sword to dumping

Article Abstract:

The US Commerce Dept has levied punitive tariffs on South Korean-made dynamic random access memories. The department says the semiconductors are being dumped, or sold below home-market prices, in an attempt to grab US market share. The new tariffs, of up to 87 percent, are aimed at bringing the chips' prices up to what is supposed to be a fair market rate. As with most dumping cases, the truth is a good deal murkier than appears at first blush. While tariffs benefit one US industry, they can hurt another. Micron Technology Inc, one of the few US firms to make DRAMs, filed the dumping complaint after watching Korean rivals grab a 28 percent share of the US market. But US-based AST Research Inc uses the Korean DRAMs to make low-cost computers. The Koreans, meanwhile, worry that the new tariffs will harm their fast-growing semiconductor industry.

South Korea, Micron Technology Inc., United States. Department of Commerce, Dynamic random access memory, Tariff, MCRN

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