51442 Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices

1These companies are as follows: (1) Advanced

Microelectronics Products Inc. (Advanced

Microelectronics); (2) Alliance Semiconductor

Corp. (Alliance); (3) Asia Specific Technology

Limited; (4) Best Integrated Technology, Inc. (BIT);

(5) Chia Hsin Livestock Corp.; (6) E–CMOS

Technology Corporation; (7) Etron Technology, Inc.;

(8) G–Link Technology Corp.; (9) Holtek

Microelectronics Inc.; (10) Hualon Microelectronics

Corporation; (11) Integrated Silicon Solution

(Taiwan) Inc. (ISSI); (12) Kes Rood Technology

Taiwan Ltd.; (13) Lien Hsing Integrated Circuits

(Lien Hsing); (14) Macronix International Co., Ltd.;

(15) Mosel-Vitelic, Inc.; (16) Taiwan Memory

Technology, Inc.; (17) Taiwan Semiconductor

Manufacturing Corporation (TSMC); (18) Texas

Instruments-Acer Inc. (Texas Instruments); (19)

United Microelectronics Corporation (UMC); (20)

Utron Technology, Inc.; (21) Vanguard International

Semiconductor Corporation; and (22) Winbond

Electronics Corporation (Winbond).

will apply to products that are entered,

or withdrawn from warehouse, for

consumption on or after the date of

publication of this notice in the Federal

Register. For these entries, the Customs

Service will require a cash deposit or

posting of a bond equal to the weightedaverage amount by which the normal

value exceeds the export price as shown

below. These suspension of liquidation

instructions will remain in effect until

further notice. The weighted-average

dumping margins are as follows:

Exporter/manufacturer

Weightedaverage

percent

margin

Samsung ..................................... 1 1.59

Hyundai ....................................... 3.38

LG Semicon 2 .............................. 2 55.36

All others ..................................... 3.38

1 De minimis.

2Facts Available Rate.

ITC Notification

In accordance with section 733(f) of

the Act, we have notified the ITC of our

determination. If our final

determination is affirmative, the ITC

will determine before the later of 120

days after the date of this preliminary

determination or 45 days after our final

determination whether these imports

are materially injuring, or threatening

material injury to, a U.S. industry.

Public Comment

Case briefs or other written comments

in at least six copies must be submitted

to the Assistant Secretary for Import

Administration no later than December

29, 1997; and rebuttal briefs, no latter

than January 5, 1997. A list of

authorities used and an executive

summary of issues should accompany

any briefs submitted to the Department.

The summary should be limited to five

pages total, including footnotes. In

accordance with section 774 of the Act,

we will hold a public hearing, if

requested, to give interested parties an

opportunity to comment on arguments

raised in case or rebuttal briefs.

Tentatively, the hearing will be held on

January 7, 1998; time and room to be

determined; at the U.S. Department of

Commerce, 14th Street and Constitution

Avenue, N.W., Washington, D.C. 20230.

Parties should confirm by telephone the

time, date, and place of the hearing 48

hours before the scheduled time.

Interested parties who wish to request

a hearing, or to participate if one is

requested, must submit a written

request to the Assistant Secretary for

Import Administration, U.S. Department

of Commerce, Room 1870, within ten

days of the publication of this notice.

Requests should contain: (1) the party’s

name, address, and telephone number;

(2) the number of participants; and (3)

a list of the issues to be discussed. Oral

presentations will be limited to issues

raised in the briefs. If this investigation

proceeds normally, we will make our

final determination by February 5, 1998.

This determination is published pursuant

to sections 773(f) and 777(i) of the Act.

Dated: September 23, 1997.

Robert S. LaRussa,

Assistant Secretary for Import

Administration.

[FR Doc. 97–25942 Filed 9–30–97; 8:45 am]

BILLING CODE 3510–DS–M

DEPARTMENT OF COMMERCE

International Trade Administration

[A–583–827]

Notice of Preliminary Determination of

Sales at Less Than Fair Value and

Postponement of Final Determination:

Static Random Access Memory

Semiconductors From Taiwan

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: October 1, 1997.

FOR FURTHER INFORMATION CONTACT:

Shawn Thompson or David Genovese,

Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone:

(202) 482–1776 or (202) 482–0498,

respectively.

The Applicable Statute

Unless otherwise indicated, all

citations to the Tariff Act of 1930, as

amended (the Act), are references to the

provisions effective January 1, 1995, the

effective date of the amendments made

to the Act by the Uruguay Round

Agreements Act (URAA). In addition,

unless otherwise indicated, all citations

to the Department’s regulations are to

the regulations codified at 19 CFR part

353 (April 1, 1996).

Preliminary Determination

We preliminarily determine that static

random access memory semiconductors

(SRAMs) from Taiwan are being, or are

likely to be, sold in the United States at

less than fair value (LTFV), as provided

in section 733 of the Act. The estimated

margins of sales at LTFV are shown in

the ‘‘Suspension of Liquidation’’ section

of this notice.

Case History

Since the initiation of this

investigation (Notice of Initiation of

Antidumping Duty Investigations:

SRAMs from the Republic of Korea and

Taiwan (62 FR 13596, March 21, 1997)),

the following events have occurred:

During March and April 1997, the

Department obtained information from

the American Institute in Taiwan

identifying potential producers and/or

exporters of the subject merchandise to

the United States. Based on this

information, in April 1997, the

Department issued antidumping

questionnaires to 22 companies.1

Also in April 1997, the United States

International Trade Commission (ITC)

issued an affirmative preliminary injury

determination in this case (see ITC

Investigation No. 731–TA–761–762).

In May 1997, the Department received

responses to Section A of the

questionnaire from 18 of the 22

companies. Three of the remaining

companies, Advanced Microelectronics,

BIT, and Texas-Instruments, did not

submit responses to Section A.

Therefore, we have assigned a margin to

these companies based on facts

available. (See the ‘‘Facts Available’’

section below, for further discussion.)

Regarding the fourth company, Lien

Hsing, we were notified by one of the

respondents in this investigation that it

had received the questionnaire

addressed to Lien Hsing, but that it was

unaware of the existence of this

company. Because Lien Hsing never

received the Department’s questionnaire

and we found no way in which to locate

and serve it with the questionnaire, no

adverse inference is warranted with

respect to it.

Based on the information received

from the 18 responding companies, in

May 1997, the Department determined

that it did not have the administrative

resources to investigate all known

producers and/or exporters of SRAMs
Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices 51443

during the period of investigation (POI).

Accordingly, we decided to limit the

number of mandatory respondents in

this investigation to the five companies

that we believed had the largest sales

volumes of SRAMs to the United States

during the POI, pursuant to section

777A(c) of the Act. These companies are

Alliance, ISSI, TSMC, UMC, and

Winbond (hereinafter ‘‘respondents’’).

For a more detailed discussion

regarding this issue, see the

memorandum to Louis Apple from the

Team, dated May 21, 1997.

Respondents submitted questionnaire

responses in June 1997. We issued

supplemental questionnaires to these

companies in July 1997, and received

responses to these questionnaires in

August 1997. Based on a review of these

responses, we have excluded TSMC

from our analysis in this investigation.

For a discussion of this issue, see the

memorandum to Louis Apple from the

Team, dated September 23, 1997.

Pursuant to section 735(a)(2)(A) of the

Act, on August 14, 1997, one of the

respondents, Winbond, requested that,

in the event of an affirmative

preliminary determination in this

investigation, the Department

postponed its final determination until

no later than 135 days after the

publication of this notice in the Federal

Register. For further discussion, see the

‘‘Postponement of Final Determination

and Extension of Provisional Measures’’

section of this notice.

In September 1997, Alliance

submitted revised sales and cost

databases at the Department’s request.

Facts Available

Three interested parties in this

investigation, Advanced

Microelectronics, BIT, and Texas

Instruments, failed to respond to the

Department’s requests for information.

Specifically, these companies did not

provide a response to the Department’s

questionnaire issued in April 1997.

Section 776(a)(2) of the Act provides

that if an interested party: (1) Withholds

information that has been requested by

the Department, (2) fails to provide such

information in a timely manner or in the

form or manner requested, (3)

significantly impedes a determination

under the antidumping statute, or (4)

provides such information but the

information cannot be verified, the

Department shall, subject to subsections

782(c)(1) and (e) of the Act, use facts

otherwise available in reaching the

applicable determination. Because

Advanced Microelectronics, BIT, and

Texas Instruments failed to respond to

the Department’s questionnaire and

because subsections (c)(1) and (e) do not

apply with respect to these companies,

we must use facts otherwise available to

calculate their dumping margins.

Section 776(b) of the Act provides

that adverse inferences may be used

against a party that has failed to

cooperate by not acting to the best of its

ability to comply with requests for

information. See also Statement of

Administrative Action accompanying

the URAA, H.R. Rep. No. 316, 103d

Cong., 2d Sess. 870 (SAA). The failure

of Advanced Microelectronics, BIT, and

Texas Instruments to reply to the

Department’s questionnaires or to

provide a satisfactory explanation of

their conduct demonstrates that they

have failed to act to the best of their

ability in this investigation. Thus, the

Department has determined that, in

selecting among the facts otherwise

available to these companies, an adverse

inference is warranted. As facts

otherwise available, we are assigning to

Advanced Microelectronics, BIT, and

Texas Instruments the highest margin

stated in the notice of initiation, 113.85

percent.

Section 776(c) of the Act provides

that, when the Department relies on

secondary information (such as the

petition) in using the facts otherwise

available, it must, to the extent

practicable, corroborate that information

from independent sources that are

reasonably at its disposal. When

analyzing the petition, the Department

reviewed all of the data the petitioner

relied upon in calculating the estimated

dumping margins, and adjusted those

calculations where necessary. See

Initiation Checklist, dated March 17,

1997. These estimated dumping margins

were based on a comparison of

constructed value (CV) to U.S. price, the

latter of which was based on price

quotations offered by two Taiwanese

companies. The estimated dumping

margins, as recalculated by the

Department, ranged from 93.54 to

113.85 percent. For purposes of

corroboration, the Department reexamined the price information

provided in the petition in light of

information developed during the

investigation and found that it has

probative value. See the memorandum

from the Team to Louis Apple dated

September 23, 1997, for a detailed

explanation of corroboration of the

information in the petition.

Therefore, as adverse facts available,

we are assigning to Advanced

Microelectronics, BIT, and Texas

Instruments the highest margin stated in

the notice of initiation, 113.85 percent.

This margin is higher than the margin

calculated for any respondent in this

investigation.

Postponement of Final Determination

and Extension of Provisional Measures

Two of the respondents, Winbond and

Alliance, requested on September 11

and 18, 1997, respectively, that, in the

event of an affirmative preliminary

determination in this investigation, the

Department postpone its final

determination until no later than 135

days after the publication of this notice

in the Federal Register, pursuant to

section 735(a)(2)(A) of the Act. In

accordance with 19 CFR section

353.20(b), because (1) our preliminary

determination is affirmative, (2)

Winbond and Alliance account for a

significant proportion of exports of the

subject merchandise, and (3) no

compelling reasons for denial exist, we

are granting respondents’ request and

are postponing the final determination

until no later than 135 days after the

publication of this notice in the Federal

Register. Suspension of liquidation will

be extended accordingly (see

Preliminary Determination of Sales at

Less Than Fair Value and Postponement

of Final Determination: Open-End Spun

Rayon Singles Yarn From Austria, 62 FR

14399, 14400 (March 26, 1997); Final

Determination of Sales at Less Than

Fair Value: Certain Pasta From Italy, 61

FR 30326 (June 14, 1996)).

Scope of Investigation

The products covered by this

investigation are synchronous,

asynchronous, and specialty SRAMs

from Taiwan, whether assembled or

unassembled. Assembled SRAMs

include all package types. Unassembled

SRAMs include processed wafers or die,

uncut die and cut die. Processed wafers

produced in Taiwan, but packaged, or

assembled into memory modules, in a

third country, are included in the scope;

processed wafers produced in a third

country and assembled or packaged in

Taiwan are not included in the scope.

The scope of this investigation

includes modules containing SRAMs.

Such modules include single in-line

processing modules (SIPs), single in-line

memory modules (SIMMs), dual in-line

memory modules (DIMMs), memory

cards, or other collections of SRAMs,

whether unmounted or mounted on a

circuit board.

The SRAMs within the scope of this

investigation are classifiable under the

subheadings 8542.13.8037 through

8542.13.8049, 8473.30.10 through

8473.30.90, and 8542.13.8005 of the

Harmonized Tariff Schedule of the

United States (HTSUS). Although the

HTSUS subheading is provided for

convenience and customs purposes, our
51444 Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices

2 In accordance with section 773(b)(2)(D) of the

Act, we conducted the recovery of cost test using

annual cost data.

written description of the scope of this

investigation is dispositive.

Period of Investigation

The POI is January 1, 1996, through

December 31, 1996.

Time Period for Cost and Price

Comparisons

Section 777A(d) of the Act states that

in an investigation, the Department will

compare the weighted average of the

normal values to the weighted average

of the export prices/constructed export

prices. Generally, the Department will

compare sales and conduct the sales

below cost test using annual averages.

However, where prices have moved

significantly over the course of the POI,

it has been the Department’s practice to

use shorter time periods. See, e.g., Final

Determination of Sales at Less Than

Fair Value: Erasable Programmable

Read Only Memories (EPROMs) from

Japan, 51 FR 39680, 39682 (October 30,

1986), Final Determination of Sales at

Less Than Fair Value: Dynamic Random

Access Memory Semiconductors of One

Megabit and Above From the Republic

of Korea, 58 FR 15467, 15476 (March 23,

1993).

We invited comments from interested

parties regarding this issue. An analysis

of these comments revealed that all

parties agreed that the SRAMs market

experienced a significant and consistent

price decline during the POI.

Accordingly, in recognition of the

significant and consistent price declines

in the SRAMs market during the POI,

the Department has compared prices

and conducted the sales below cost test

using quarterly data.2

Treatment of Foundry Sales and

Elimination of TSMC as a Respondent

During the course of this

investigation, we found that two of the

five companies we had selected to be

respondents, UMC and TSMC, acted as

foundries for SRAMs design houses. As

foundries, they manufactured processed

SRAMs wafers according to designs

provided by the design houses. Two of

these design houses, Alliance and ISSI,

were also selected to be respondents.

The design houses arranged for the

probing, testing, and assembly of the

processed wafers into individual

SRAMs that were subsequently sold to

unaffiliated downstream purchasers.

At the time we selected respondents,

we had not determined conclusively

how the transaction between a design

house and its foundry should be treated.

See the memorandum from the Team to

Louis Apple, dated May 15, 1997. We

noted that, when the Department had

had an opportunity to perform a

thorough analysis of the respondents’

responses to our questionnaire, the

Department may conclude that the

appropriate sales transaction to analyze

is not the sale from the foundry to the

design house, but the subsequent

downstream sale of the encapsulated

SRAMs to the United States.

When considering this issue for

purposes of this determination, we

determined that it was necessary to

decide which entity, the foundry or the

design house, was the manufacturer of

the subject merchandise, and which

entity controlled the ultimate sale of it.

For guidance in making this

determination, we relied on the

Department’s policy expressed in our

proposed regulations which, while they

are not our final regulations, state our

policy on this issue. The proposed

regulations state that: ‘‘[w]here a party

owning the components of subject

merchandise has a subcontractor

manufacture or assemble that

merchandise for a fee, the Department

will consider the owner to be the

manufacturer, because that party has

ultimate control over how the

merchandise is produced and the

manner in which it is ultimately sold.

The Department will not consider the

subcontractor to be the manufacturer or

producer regardless of the proportion of

production attributable to the

subcontracted operation or the location

of the subcontractor or owner of the

good.’’ See Notice of Proposed

Rulemaking and Request for Public

Comment: Antidumping Duties;

Countervailing Duties, 61 FR 7308, 7330

(February 26, 1996).

We also reviewed section 351.401(h)

of the Department’s regulations which,

while not applicable to this

investigation, codifies past practice and

current policy. Section 351.401(h) states

that the Department ‘‘will not consider

a toller or subcontractor to be a

manufacturer or producer where the

toller or subcontractor does not acquire

ownership, and does not control the

relevant sale of, the subject merchandise

or foreign like product.’’

In reviewing and analyzing the

information submitted by respondents

concerning the relationship between the

design houses and their foundries, we

have found the following: the design

house performs all of the product

research and development for the

SRAMs that are to be produced. The

design house produces, or arranges and

pays for the production of, the design

mask. At all stages of production, it

retains ownership of the proprietary

design and design mask. The design

house then subcontracts the production

of processed wafers with a foundry and

provides the foundry with the design

mask. Design houses tell the foundry

what and how much to make. The

foundry agrees to dedicate a certain

amount of its production capacity to the

production of the processed wafers for

the design house. The foundry has no

right to sell those wafers to any party

other than the design house unless the

design house fails to pay for the wafers.

Once the design house takes possession

of the processed wafers, it arranges for

the subsequent steps in the production

process (i.e., probing, testing, and

assembly), then sells the encapsulated

SRAMs to downstream customers.

The design of the processed wafer is

not only an important part of the

finished product, it is a substantial

element of production and imparts the

essential features of the product. The

design defines the ultimate

characteristics and performance of the

subject merchandise and delineates the

purposes for which it can be used. The

foundries manufactured processed

SRAMs wafers using the proprietary

designs of the design houses during the

POI. As such, they did not control the

production of the processed wafers in

question, but rather merely translated

the design of other companies into

actual products.

For purposes of this investigation, we

have determined that the entity that

controls and owns the SRAMs design,

i.e., the design house, controls the

production, and ultimate sale, of the

subject merchandise. Consequently, we

have determined to disregard the

foundry sales of UMC and TSMC for

purposes of this investigation.

Moreover, because all of TSMC’s sales

during the POI were foundry sales, we

have determined that it should no

longer be considered a respondent in

this investigation. For a more detailed

analysis of this decision, see the

memorandum from the Team to Louis

Apple, dated September 23, 1997,

concerning the Treatment of Foundry

Sales and the Elimination of TSMC as

a Respondent.

Fair Value Comparisons

To determine whether sales of SRAMs

from Taiwan to the United States were

made at less than fair value, we

compared the United States Price (USP)

to the Normal Value (NV), as described

in the ‘‘United States Price’’ and

‘‘Normal Value’’ sections of this notice,

below. In accordance with section

777A(d)(1)(A)(i) of the Act, we
Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices 51445

calculated weighted-average USPs for

comparison to weighted-average NVs.

In order to determine whether or not

we should base price-averaging groups

on customer types, we conducted an

analysis of the prices submitted by

respondents. This analysis does not

indicate that there was a consistent and

uniform difference in prices between

customer types. Accordingly, we have

not based price comparisons on

customer types.

In making our comparisons, in

accordance with section 771(16) of the

Act, we considered all products sold in

the home market, fitting the description

specified in the ‘‘Scope of Investigation’’

section of this notice, above, to be

foreign like products for purposes of

determining appropriate product

comparisons to U.S. sales. Where there

were no sales of identical merchandise

in the home market to compare to U.S.

sales, we compared U.S. sales to the

next most similar foreign like product,

based on the characteristics listed in

Sections B and C of the Department’s

antidumping questionnaire.

Regarding Alliance, because we found

no home market sales at prices above

the COP, we made no price-to-price

comparisons. See the ‘‘Normal Value’’

section of this notice, below, for further

discussion.

Regarding ISSI, because this company

did not report cost or difference in

merchandise information for certain

products sold in the United States, there

is insufficient information on the record

to calculate a margin for these products.

Accordingly, we based the margin for

the sales in question on facts available.

As facts available, we used the highest

non-aberrational margin calculated for

any other product.

Level of Trade and Constructed Export

Price (CEP) Offset

In accordance with section

773(a)(1)(B) of the Act, to the extent

practicable, we determined NV based on

sales in the comparison market at the

same level of trade as the export price

(EP) or CEP. The NV level of trade is

that of the starting-price sales in the

comparison market or, when NV is

based on CV, that of the sales from

which we derive selling, general and

administrative (SG&A) expenses and

profit. For EP, it is also the level of the

starting-price sale, which is usually

from exporter to importer. For CEP, it is

the level of the constructed sale from

the exporter to the importer.

To determine whether NV sales are at

a different level of trade than EP or CEP,

we examined stages in the marketing

process and selling functions along the

chain of distribution between the

producer and the unaffiliated customer.

If the comparison-market sales are at a

different level of trade, and the

difference affects price comparability, as

manifested in a pattern of consistent

price differences between the sales on

which NV is based and comparisonmarket sales at the level of trade of the

export transaction, we make a level of

trade adjustment under section

773(a)(7)(A) of the Act. Finally, for CEP

sales, if the NV level is more remote

from the factory than the CEP level and

there is no basis for determining

whether the difference in the levels

between NV and CEP affects price

comparability, we adjust NV under

section 773(a)(7)(B) of the Act (the CEP

offset provision). See Certain Welded

Carbon Steel Standard Pipes and Tubes

From India: Preliminary Results of New

Shipper Antidumping Duty

Administrative Review, 62 FR 23760,

23761 (May 1, 1997).

Only one of the respondents in this

investigation, UMC, claimed that its

home market sales were made at

different levels of trade. Specifically,

UMC claimed that its sales of branded

SRAMs products to original equipment

manufacturers (OEMs) and distributors

were made at two distinct levels of trade

because it provided greater customer

support to, and performed more

significant marketing functions for, its

OEM customers. In particular, UMC

stated that it met with OEM customers

to assist them in qualifying UMC’s

products for particular applications and

to discuss how UMC’s products may

meet the customer’s current and future

needs. Regarding marketing functions,

UMC stated that its salesmen make

regular on-site visits to OEM customers

and attend trade shows primarily

targeted at OEMs. However, UMC does

not attend similar shows targeted at

distributors.

We examined the selling activities at

each reported marketing stage and

found that there was no substantive

difference in the selling functions

performed by UMC at either of its

claimed marketing stages. Consequently,

we determine that only one level of

trade exists with respect to sales made

by UMC to all customers. For a detailed

explanation of this analysis, see the

memorandum from the Team to Louis

Apple, dated September 23, 1997.

Because we have found that only one

level of trade existed in the home

market for all respondents during the

POI, we conducted an analysis to

determine whether a CEP offset was

warranted for each respondent. In order

to determine whether NV was

established at a level of trade which

constituted a more advanced state of

distribution than the level of trade of the

CEP, we compared the selling functions

performed for home market sales with

those performed with respect to the CEP

(i.e., excluding economic activities

occurring in the United States). We

found that all respondents performed

most of the selling functions and

services related to U.S. sales at their

sales offices in the United States, and

therefore, these selling functions are

associated with those expenses which

we deduct from the CEP starting price,

as specified in section 772(d) of the Act.

Regarding home market sales,

respondents performed largely the same

selling functions for sales to unaffiliated

customers as were performed in the

United States. Therefore, their sales in

Taiwan were at a more advanced stage

of marketing and distribution (i.e., more

remote from the factory) than the

constructed U.S. level of trade, which

represents an ex-factory price after the

deduction of expenses associated with

U.S. selling activities. However, because

the respondents sell at only one home

market level of trade, the difference in

the level of trade cannot be quantified.

Because the difference in the level of

trade cannot be quantified, but the home

market is at a more advanced level of

trade, we have granted a CEP offset to

all respondents.

United States Price

For UMC and Winbond, we based

USP on EP, in accordance with section

772(a) of the Act, when the subject

merchandise was sold directly to the

first unaffiliated purchaser in the United

States prior to importation because CEP

methodology was not otherwise

indicated.

In addition, for all companies, where

sales to the first unaffiliated purchaser

took place after importation into the

United States, we based USP on CEP, in

accordance with section 772(b) of the

Act.

We made company-specific

adjustments as follows:

A. Alliance

We calculated CEP based on packed,

FOB U.S. warehouse prices, to

unaffiliated purchasers in the United

States. We corrected gross unit price for

clerical errors identified in Alliance’s

narrative response. We made deductions

from the gross unit price, where

appropriate, for discounts. We also

made deductions for international

freight (including air freight and U.S.

Customs merchandise processing fees),

where appropriate, pursuant to section

772(c)(2)(A) of the Act.

In accordance with section 772(d) (1)

and (2) of the Act, we made additional
51446 Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices

deductions for commissions, warranty

and credit expenses, indirect selling

expenses, inventory carrying costs, U.S.

repacking expenses and U.S. further

manufacturing costs. Regarding credit

expenses, Alliance reported that it had

not received payment for certain sales as

of the date of its latest questionnaire

response. As such, we based the date of

payment for those sales on the date of

the preliminary determination and

recalculated credit expenses

accordingly.

Pursuant to section 772(d)(3) of the

Act, gross unit price was further

reduced by an amount for profit, to

arrive at CEP. In accordance with

section 772(f) of the Act, the CEP profit

rate was calculated using the expenses

incurred by Alliance on its sales of the

subject merchandise in the United

States and foreign like product in the

home market and the profit associated

with those sales.

With regard to modules which were

further-manufactured in the United

States, we have based USP on the net

price of the modules rather than the net

price of the individual SRAMs included

in the modules.

B. ISSI

We calculated CEP based on packed,

FOB U.S. warehouse prices, to

unaffiliated purchasers in the United

States. We made deductions from the

gross unit price, where appropriate, for

discounts. We also made deductions for

foreign inland freight, pre-sale

warehousing expenses, foreign and U.S.

inland insurance, foreign brokerage and

handling, and international freight

(including air freight, U.S. customs

merchandise processing fees, and U.S.

inland freight to ISSI’s U.S. office),

where appropriate, pursuant to section

772(c)(2)(A) of the Act.

In accordance with section 772(d)(1)

of the Act, we made additional

deductions for commissions, credit

expenses, indirect selling expenses,

inventory carrying costs, and U.S.

repacking expenses. We recalculated

credit expenses using the interest rate

paid by ISSI (Taiwan) on its borrowings

denominated in U.S. dollars. In

addition, where ISSI had not received

payment for certain sales as of the date

of its latest questionnaire response, we

based the date of payment for those

sales on the date of the preliminary

determination and recalculated credit

expenses accordingly.

Pursuant to section 772(d)(3) of the

Act, gross unit price was further

reduced by an amount for profit, to

arrive at CEP. In accordance with

section 772(f) of the Act, the CEP profit

rate was calculated using the expenses

incurred by ISSI and its affiliate on their

sales of the subject merchandise in the

United States and foreign like product

in the home market and the profit

associated with those sales.

C. UMC

We calculated EP and CEP based on

packed, FOB prices, to unaffiliated

purchasers in the United States. We

adjusted the gross unit price for billing

adjustments and freight charges. We

made deductions from the gross unit

price, where appropriate, for discounts.

We also made deductions for foreign

inland freight, foreign brokerage and

handling, and international freight,

where appropriate, pursuant to section

772(c)(2)(A) of the Act.

Where USP was based on CEP, we

made additional deductions, in

accordance with section 772(d)(1) of the

Act, for commissions, warranty and

credit expenses, indirect selling

expenses, and inventory carrying costs.

Regarding credit expenses, UMC

reported that it had not received

payment for certain sales as of the date

of its latest questionnaire response.

Consequently, we based the date of

payment for those sales on the date of

the preliminary determination and

recalculated credit expenses

accordingly.

Pursuant to section 772(d)(3) of the

Act, gross unit price was further

reduced by an amount for profit, to

arrive at CEP. In accordance with

section 772(f) of the Act, the CEP profit

rate was calculated using the expenses

incurred by UMC and its affiliates on

their sales of the subject merchandise in

the United States and foreign like

product in the home market and the

profit associated with those sales.

D. Winbond

We calculated EP and CEP based on

packed, delivered and FOB prices to

unaffiliated purchasers in the United

States. We made deductions from the

gross unit price, where appropriate, for

discounts. We also made deductions for

foreign inland freight, pre-sale

warehousing expenses, foreign inland

insurance, foreign brokerage and

handling, international freight

(including air freight, U.S. inland freight

from the port to Winbond’s U.S.

warehouse, U.S. brokerage and handling

fees, and customs fees), international

insurance, U.S. customs merchandise

processing fees, and U.S. inland freight

to customer, where appropriate,

pursuant to section 772(c)(2)(A) of the

Act.

Where USP was based on CEP, we

made additional deductions, in

accordance with section 772(d)(1) of the

Act, for commissions, credit expenses,

advertising expenses, warranty

expenses, technical service expenses,

indirect selling expenses, inventory

carrying costs, and U.S. repacking

expenses.

Pursuant to section 772(d)(3) of the

Act, gross unit price was further

reduced by an amount for profit, to

arrive at CEP. In accordance with

section 772(f) of the Act, the CEP profit

rate was calculated using the expenses

incurred by Winbond and its affiliates

on their sales of the subject merchandise

in the United States and foreign like

product in the home market and the

profit associated with those sales.

Normal Value

In order to determine whether there is

a sufficient volume of sales in the home

market to serve as a viable basis for

calculating NV (i.e., the aggregate

volume of home market sales of the

foreign like product is greater than five

percent of the aggregate volume of U.S.

sales), we compared each respondent’s

volume of home market sales of the

foreign like product to the volume of

U.S. sales of the subject merchandise, in

accordance with section 773(a)(1)(C) of

the Act. Because each respondent’s

aggregate volume of home market sales

of the foreign like product was greater

than five percent of its aggregate volume

of U.S. sales for the subject

merchandise, we determined that the

home market was viable for each

respondent.

Because UMC and Winbond reported

home market sales to an affiliated party

during the POI, as defined by section

771(4)(B) of the Act, we tested these

sales to ensure that the affiliated party

sales were at ‘‘arm’s length,’’ in

accordance with our practice. To

conduct this test, we compared the gross

unit prices of sales to affiliated and

unaffiliated customers net of all

movement charges, discounts and

rebates, and packing, where appropriate.

Based on the results of that test, we used

the sales from UMC and Winbond to

their affiliated parties because they were

made at ‘‘arm’s length.’’

Based on the cost allegation contained

in the petition, the Department found

reasonable grounds to believe or suspect

that sales in the home market were

made at prices below the cost of

producing the merchandise, in

accordance with section 773(b)(1) of the

Act. As a result, the Department

initiated an investigation to determine

whether the respondents made home

market sales during the POI at prices

below their respective COPs within the

meaning of section 773(b) of the Act.
Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices 51447

We calculated the COP based on the

sum of each respondent’s cost of

materials and fabrication for the foreign

like product, plus amounts for SG&A

and packing costs, in accordance with

section 773(b)(3) of the Act.

Where possible, we used the

respondents’ reported COP amounts,

adjusted as discussed below, to compute

quarterly weighted-average COPs during

the POI. In cases where there was no

production within the same quarter as a

given sale, we referred to the most

recent quarter, prior to the sale, for

which costs had been reported. In cases

where there was no cost reported for

either the same quarter as the sale, or a

prior quarter, we used the reported costs

from the closest subsequent quarter in

which production occurred.

In their calculation of research and

development expenses (R&D), three of

the respondents, Alliance, ISSI, and

Winbond, excluded from their

calculation R&D incurred on certain

semiconductor products. The fourth

respondent, UMC, calculated R&D on a

quarterly basis. For all respondents, we

revised the R&D ratios to allocate the

total amount of semiconductor R&D for

the POI over the total cost of sales of

semiconductor products sold during the

POI, using an annual ratio. See the

Concurrence memorandum from James

Maeder to Louis Apple, dated

September 23, 1997, for further

discussion. We preliminarily determine

that R&D related to semiconductors

benefits all semiconductor products,

and that allocation of R&D on a productspecific basis was not appropriate. In

support of our methodology, we have

placed on the record information

regarding cross-fertilization of

semiconductor R&D.

We compared the weighted-average

quarterly COP figures to home market

sales of the foreign like product as

required under section 773(b) of the Act,

in order to determine whether these

sales had been made at prices below

COP. On a product-specific basis, we

compared the COP to the home market

prices, less any applicable movement

charges and discounts.

In determining whether to disregard

home market sales made at prices below

the COP, we examined (1) whether,

within an extended period of time, such

sales were made in substantial

quantities, and (2) whether such sales

were made at prices which permitted

the recovery of all costs within a

reasonable period of time in the normal

course of trade.

Where 20 percent or more of a

respondent’s sales of a given product

were at prices below the COP, we found

that sales of that model were made in

‘‘substantial quantities’’ within an

extended period of time, in accordance

with section 773(b)(2) (B) and (C) of the

Act. To determine whether prices were

such as to provide for recovery of costs

within a reasonable period of time, we

tested whether the prices which were

below the per unit cost of production at

the time of the sale were above the

weighted-average per-unit cost of

production for the POI, in accordance

with section 773(b)(2)(D). If they were,

we disregarded below cost sales in

determining NV.

In accordance with section 773(e) of

the Act, we calculated CV based on the

sum of each respondent’s cost of

materials, fabrication, SG&A, profit, and

U.S. packing costs. In accordance with

section 773(e)(2)(A) of the Act, we based

SG&A expenses and profit on the

amounts incurred and realized by each

respondent in connection with the

production and sale of the foreign like

product in the ordinary course of trade,

for consumption in the foreign country.

Where respondents made no home

market sales in the ordinary course of

trade (i.e., all sales were found to be

below cost), we based profit and SG&A

expenses on the weighted average of the

profit and SG&A data computed for

those respondents with home market

sales of the foreign like product made in

the ordinary course of trade.

We deducted from CV weightedaverage home market direct selling

expenses incurred on sales made in the

ordinary course of trade. Where a

company had no sales above COP, we

based home market direct selling

expenses on the weighted average

selling expense data computed for those

respondents with home market sales of

the foreign like product in the ordinary

course of trade. Company-specific

calculations are discussed below.

A. Alliance

We relied on the reported COP and

CV amounts except as noted above.

Additionally, we did not rely on

amounts reported by Alliance for SG&A

and profit since all of Alliance’s sales

were made below the cost of

production.

Because all of Alliance’s home market

sales were sold below COP, we based

NV on CV. In addition to the

adjustments to CV reported above, in

accordance with section 773(a)(7)(B) of

the Act, we granted a CEP offset

adjustment and reduced CV by the

amount of weight-averaged home

market indirect selling expenses and

commissions incurred by respondents

with sales above the COP up to the

amount of indirect expenses deducted

from the CEP under 772(d)(1)(D).

B. ISSI

We relied on respondent’s reported

COP and CV amounts except as noted

above. Additionally, we revised the

reported general and administrative and

R&D expense ratios to use the cost of

sales figure from the audited financial

statements as the denominator in these

equations.

For those comparison products for

which there were sales at prices above

the COP, we based NV on delivered

prices to home market customers. We

made deductions for discounts, foreign

inland freight, and insurance, where

appropriate, pursuant to section

773(a)(6)(B) of the Act. We also made

deductions for credit expenses and bank

charges, pursuant to section

773(a)(6)(C)(iii) of the Act. Regarding

credit expenses, ISSI reported that it

had not received payment for certain

sales as of the date of its latest

questionnaire response. As such, we

based the date of payment for those

sales on the date of the preliminary

determination and recalculated credit

expenses accordingly.

We deducted home market indirect

selling expenses, including inventory

carrying costs and other indirect selling

expenses, up to the amount of indirect

selling expenses incurred on U.S. sales,

in accordance with section 773(a)(7)(B)

of the Act. In addition, we deducted

home market packing costs and added

U.S. packing costs, in accordance with

section 773(a)(6) of the Act. Where

appropriate, we made adjustments to

NV to account for differences in

physical characteristics of the

merchandise, in accordance with

773(a)(6)(C)(ii) of the Act and 19 CFR

353.57. Where applicable, in accordance

with 19 CFR section 353.56(b)(1), we

offset any commission paid on a U.S.

sale by reducing the NV by any home

market commissions and indirect selling

expenses remaining after the deduction

for the CEP offset.

Where NV was based on CV, we

deducted from CV the weighted-average

home market direct selling expenses. In

accordance with section 773(a)(7)(B) of

the Act, we granted a CEP offset

adjustment and reduced normal value

by the amount of commissions and

indirect selling expenses incurred by

ISSI in Taiwan on sales of SRAMs in

Taiwan, up to the amount of

commissions and indirect selling

expenses incurred on U.S. sales

deducted from the CEP, in accordance

with section 773(a)(7)(B) of the Act.

C. UMC

We relied on respondent’s COP and

CV amounts except as noted above.
51448 Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices

Additionally, we calculated 1996

bonuses to directors, supervisors, and

employees and included them in the

cost of manufacturing. We revised the

reported general and administrative

expense to exclude foreign exchange

gains. We revised the reported net

financing expense ratio to include net

foreign exchange gains related to

accounts payable.

UMC has claimed a startup

adjustment for a new fabrication facility

under section 773(f)(1)(C)(ii) and (iii) of

the Act. We conducted an analysis of

the facts and have preliminarily granted

the claimed startup adjustment. The

SAA specifies two conditions for the

application of a startup cost adjustment:

(1) The company used new

production facilities or was producing a

new product that required substantial

additional investment; and

(2) Production levels were limited by

technical factors associated with the

initial phase of commercial production.

UMC appears to have met these

threshold criteria by opening and using

a new production facility whose

production levels were limited by

technical factors associated with the

initial phase of production. In

accordance with the Act, we replaced

the unit production costs incurred

during the startup period with the unit

production costs incurred at the end of

the startup period. This resulted in the

exclusion of some costs which were

incurred during the startup period from

the actual cost calculation. The

difference between the actual costs

incurred and the costs calculated for

purposes of the startup adjustment was

amortized over the useful life of the

machinery, subsequent to the startup

phase. We also capitalized certain preproduction costs which were incurred

before the new fabrication facility began

production. We amortized these preproduction costs, beginning with the

first month in which production took

place, over the useful life of the

machinery. See the memorandum to

Louis Apple from Chris Marsh, dated

September 23, 1997, for a detailed

discussion of this issue.

For those comparison products for

which there were sales at prices above

the COP, we based NV on delivered and

FOB prices to home market customers.

For home market price-to-EP

comparisons, we made deductions,

where appropriate, for discounts, export

duties, and foreign inland freight, in

accordance with section 773(a)(6)(B) of

the Act. Pursuant to section 773

(a)(6)(C)(iii) of the Act and 19 CFR

section 353.56(a)(2), we made

circumstance of sale adjustments, where

appropriate, for differences in warranty

and credit expenses. We did not allow

an adjustment for home market

commissions because we determined

that they were not at ‘‘arm’s length.’’ See

the memorandum to Louis Apple from

the Team dated September 23, 1997, for

a detailed explanation.

For home market price-to-CEP

comparisons, we made deductions,

where appropriate, for discounts, export

duties, and foreign inland freight,

pursuant to section 773(a)(6)(B) of the

Act. We also made deductions for

warranty and credit expenses. We

deducted home market indirect selling

expenses, including inventory carrying

costs, and other indirect selling

expenses, up to the amount of indirect

selling expenses incurred on U.S. sales,

in accordance with 773(a)(7)(B) of the

Act. Where applicable, in accordance

with 19 CFR 353.56(b), we offset any

commission paid on a U.S. sale by

reducing the NV by any home market

indirect selling expenses remaining after

the deduction for the CEP offset.

For all price-to-price comparisons, we

deducted home market packing costs

and added U.S. packing costs, in

accordance with section 773(a)(6) of the

Act. In addition, where appropriate, we

made adjustments to NV to account for

differences in physical characteristics of

the merchandise, in accordance with

773(a)(6)(C)(ii) of the Act.

Where CV was compared to EP, we

made circumstance of sale adjustments,

where appropriate, for credit and

warranty expenses and U.S.

commissions in accordance with

sections 773 (a)(6)(C)(iii) and (a)(8) of

the Act. In accordance with section

773(a)(7)(B) of the Act, we granted a

CEP offset adjustment and reduced

normal value by the amount of

commissions and indirect selling

expenses incurred by UMC in Taiwan

on sales of SRAMs in Taiwan, up to the

amount of commissions and indirect

selling expenses incurred on U.S. sales

deducted from the CEP.

Where CV was compared to CEP, we

deducted from CV, where appropriate,

credit and warranty expenses. We also

deducted indirect selling expenses,

including inventory carrying costs and

other indirect selling expenses, up to

the amount of commissions and indirect

selling expenses incurred on U.S. sales,

in accordance with 773(a)(7)(B) of the

Act.

D. Winbond

We relied on the reported COP and

CV amounts except as noted above.

Additionally, we reclassified production

technology royalty expenses reported in

the Sections B and C of our

questionnaire as a cost of

manufacturing. We included 1996

bonuses to directors, supervisors, and

employees in the cost of manufacturing.

We revised the reported general and

administrative expense to exclude

foreign exchange gains and to include

miscellaneous income and expense. We

revised the reported net financing

expense ratio to include net foreign

exchange gains related to accounts

payable.

For those comparison products for

which there were sales at prices above

the COP, we based NV on delivered

prices to home market customers.

For home market price-to-EP

comparisons, we made deductions,

where appropriate, for discounts, import

duties and development fees paid on

sales to customers outside of duty free

zones, and home market movement

charges including pre-sale warehouse

expenses, foreign inland freight,

brokerage and handling charges, and

inland insurance. Pursuant to section

773 (a)(6)(C)(iii) of the Act, we made

circumstance of sale adjustments, where

appropriate, for differences in credit

expenses (offset by the interest revenue

actually received by the respondent),

direct advertising expenses, warranty

expenses, technical service expenses,

and post-sale payments to a third-party

customer.

For home market price-to-CEP

comparisons, we made deductions for

discounts, import duties and

development fees paid on sales to

customers outside of duty free zones,

and home market movement charges

including pre-sale warehouse expenses,

foreign inland freight, brokerage and

handling charges, and inland insurance,

where appropriate, in accordance with

section 773(a)(6)(B) of the Act. We also

made deductions for credit expenses

(offset by the interest revenue actually

received by the respondent), direct

advertising expenses, warranty

expenses, technical service expenses,

and post-sale payments to a third-party

customer, pursuant to section

773(a)(6)(C)(iii) of the Act.

We deducted home market indirect

selling expenses, including inventory

carrying costs, other indirect selling

expenses, up to the amount of indirect

selling expenses incurred on U.S. sales,

in accordance with section 773(a)(7)(B)

of the Act. Where applicable, in

accordance with 19 CFR section

353.56(b), we offset any commission

paid on a U.S. sale by reducing the NV

by any home market indirect selling

expenses remaining after the deduction

for the CEP offset.

For all price-to-price comparisons, we

deducted home market packing costs

and added U.S. packing costs, in
Federal Register / Vol. 62, No. 190 / Wednesday, October 1, 1997 / Notices 51449

accordance with section 773(a)(6) of the

Act. In addition, where appropriate, we

made adjustments to NV to account for

differences in physical characteristics of

the merchandise, in accordance with

section 773(a)(6)(C)(ii) of the Act.

Where CV was compared to EP, we

deducted from CV the weighted-average

home market direct selling expenses

and added the weighted-average U.S.

product-specific direct selling expenses

in accordance with section 773

(a)(6)(C)(iii) of the Act.

Where CV was compared to CEP, we

deducted from CV the weighted-average

home market direct selling expenses. In

accordance with section 773(a)(7)(B) of

the Act, we granted a CEP offset

adjustment and reduced normal value

by the amount of indirect selling

expenses, including inventory carrying

costs and other indirect selling

expenses, up to the amount of indirect

selling expenses incurred on U.S. sales

deducted from the CEP.

Currency Conversion

We made currency conversions into

U.S. dollars based on the official

exchange rates in effect on the dates of

the U.S. sales as certified by the Federal

Reserve Bank.

Section 773A(a) directs the

Department to use a daily exchange rate

in order to convert foreign currencies

into U.S. dollars unless the daily rate

involves a fluctuation. It is the

Department’s practice to find that a

fluctuation exists when the daily

exchange rate differs from the

benchmark rate by 2.25 percent. The

benchmark is defined as the moving

average of rates for the past 40 business

days. When we determine a fluctuation

to have existed, we substitute the

benchmark rate for the daily rate, in

accordance with established practice.

Further, section 773A(b) directs the

Department to allow a 60-day

adjustment period when a currency has

undergone a sustained movement. A

sustained movement has occurred when

the weekly average of actual daily rates

exceeds the weekly average of

benchmark rates by more than five

percent for eight consecutive weeks.

(For an explanation of this method, see

Policy Bulletin 96–1: Currency

Conversions (61 FR 9434, March 8,

1996).) Such an adjustment period is

required only when a foreign currency

is appreciating against the U.S. dollar.

The use of an adjustment period was not

warranted in this case because the New

Taiwan dollar did not undergo a

sustained movement.

Verification

As provided in section 782(i) of the

Act, we will verify all information

determined to be acceptable for use in

making our final determination.

Suspension of Liquidation

In accordance with section 733(d) of

the Act, we are directing the Customs

Service to suspend liquidation of all

imports of subject merchandise that are

entered, or withdrawn from warehouse,

for consumption on or after the date of

publication of this notice in the Federal

Register. We will instruct the Customs

Service to require a cash deposit or the

posting of a bond equal to the weightedaverage amount by which the NV

exceeds the U.S. price, as indicated in

the chart below. These suspension of

liquidation instructions will remain in

effect until further notice. The

weighted-average dumping margins are

as follows:

Exporter/manufacturer

Weighted-average margin percentage

Advanced Microelectronics ........... 113.85

Alliance ......................................... 59.06

BIT ................................................ 113.85

ISSI ............................................... 10.96

Texas Instruments ........................ 113.85

UMC .............................................. 63.36

Winbond ........................................ 94.10

All Others ...................................... 41.30

Pursuant to section 735(c)(5)(A) of the

Act, the Department has excluded the

margins determined entirely under

section 776 of the Act from the

calculation of the ‘‘All Others Rate.’’

ITC Notification

In accordance with section 733(f) of

the Act, we have notified the ITC of our

determination. If our final

determination is affirmative, the ITC

will determine before the later of 120

days after the date of this preliminary

determination or 45 days after our final

determination whether these imports

are materially injuring, or threaten

material injury to, the U.S. industry.

Public Comment

Case briefs or other written comments

in at least ten copies must be submitted

to the Assistant Secretary for Import

Administration no later than December

18, 1997, and rebuttal briefs no later

than December 22, 1997. A list of

authorities used and an executive

summary of issues should accompany

any briefs submitted to the Department.

Such summary should be limited to five

pages total, including footnotes. In

accordance with section 774 of the Act,

we will hold a public hearing, if

requested, to afford interested parties an

opportunity to comment on arguments

raised in case or rebuttal briefs.

Tentatively, the hearing will be held on

December 23, 1997, time and room to be

determined, at the U.S. Department of

Commerce, 14th Street and Constitution

Avenue, N.W., Washington, D.C. 20230.

Parties should confirm by telephone the

time, date, and place of the hearing 48

hours before the scheduled time.

Interested parties who wish to request

a hearing, or to participate if one is

requested, must submit a written

request to the Assistant Secretary for

Import Administration, U.S. Department

of Commerce, Room 1870, within ten

days of the publication of this notice.

Requests should contain: (1) The party’s

name, address, and telephone number;

(2) the number of participants; and (3)

a list of the issues to be discussed. Oral

presentations will be limited to issues

raised in the briefs. If this investigation

proceeds normally, we will make our

final determination by no later than 135

days after the publication of this notice

in the Federal Register.

This determination is published

pursuant to section 733(d) of the Act.

Dated: September 23, 1997.

Robert S. LaRussa,

Assistant Secretary for Import

Administration.

[FR Doc. 97–25943 Filed 9–30–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–421–701]

Brass Sheet and Strip From the

Netherlands: Final Results of

Antidumping Duty Administrative

Review

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of

antidumping duty administrative

review.

SUMMARY: On May 12, 1997, the

Department of Commerce (the

Department) published the preliminary

results of the administrative review of

the antidumping duty order on brass

sheet and strip from the Netherlands.

This review covers sales to the United

States by one manufacturer/exporter,

Outokumpu Copper Strip B.V. (OBV),

and its U.S. affiliate, Outokumpu

Copper (USA), Inc., of the subject

merchandise during the period of