PUBLIC DOCUMENT

MICRON TECHNOLOGY, INC. V. THE UNITED STATES AND

LG SEMICON CO., LTD AND LG SEMICON AMERICA, INC.

Court No. 96-06-01529

Slip Op. 99-51 (June 16, 1999)

FINAL RESULTS OF REDETERMINATION

PURSUANT TO COURT REMAND

SUMMARY

The Department of Commerce (the Department) has prepared these final results of redetermination pursuant to a remand from the Court of International Trade (the Court) in Micron Technology v. United States and LG Semicon Co., Ltd., and LG Semicon America, Inc. (Court No. 96-06-01529, June 16, 1999) (Remand Order). The Court's Remand Order covers one issue in the final results of the administrative review of the antidumping duty order on dynamic random access memory semiconductors of one megabit and above (DRAMs) from the Republic of Korea covering the period October 29, 1992 through April 30, 1994. That issue is the Department's methodology for calculating total research and development (R&D) expenses for LG Semicon Co., Ltd. (LGS). In accordance with the Court's remand instructions, we have recalculated LGS's margin of dumping in this review segment. These changes did not affect LGS's margin of dumping which remains at 0.00 percent for this review period.

BACKGROUND

On May 6, 1996, the Department published in the Federal Register a notice of final results of antidumping duty administrative review on DRAMs from Korea. See Notice of Final Results of Antidumping Administrative Review: Dynamic Random Access Memory

Semiconductors of One Megabit or Above from the Republic of Korea, 61 FR 20216 (May 6, 1996) (Final Results). In these Final Results, the Department stated that "{i}n these calculations, the Department relied on LGS's accounting system to determine the total R&D figure applicable to the analysis: it amortized any R&D expenses that LGS amortized in its own books and records and it expensed any R&D expenses that LGS expensed." See Final Results at 20219.

On January 28, 1999, the Court remanded the Department's final determination, Micron Technology v. United States and LG Semicon Co., Ltd., and LG Semicon America, Inc. (Slip Op. 99-12, January 28, 1999). In its remand, the Court ordered the Department to clarify its methodology for calculating total R&D expenses and, if necessary, recalculate the margin for LGS.

In the Department's first redetermination on remand Final Results of Redetermination Pursuant to Court Remand (March 31, 1999) (Remand Results), the Department recalculated LGS's non-purchased R&D costs, including all non-purchased R&D recognized by LGS in its financial statements for 1993. This changed the total R&D figure in the Department's calculations from [ * * * ] won to [ * * * ] won.

In its remand of the Department's Remand Results, the Court found that "it is distortive and, indeed, punitive to base LG Semicon's total R&D figure on those costs that were expensed and incurred in 1993 plus those costs that were expensed in 1993, though incurred prior to 1993. This approach 'effectively results in double counting' costs incurred by LG Semicon." The Court ordered the Department to revise its total R&D methodology to exclude non-purchased R&D costs that were incurred prior to 1993, but expensed in 1993, and , if necessary, to recalculate the margin for LGS

DISCUSSION

The Department respectfully disagrees with the Court's remand opinion, particularly in light of the Court's holding in Micron Technology, Inc. v. United States, 893 F. Supp. 21 (Ct. Intl. Trade 1995), aff'd, 117 F.3d 1386 (Fed. Cir. 1997) instructing the Department to accept LGS's amortized R&D costs. In our view, if a company elects to amortize, fully inclusive R&D costs should include the amounts of amortized R&D attributed to the financial reporting period in question. Limiting our antidumping calculations to only those R&D costs that were incurred and expensed in a reporting period would mean that where a company amortizes its R&D expenses, the Department will not be able to account for the preponderance of R&D costs associated with the product under review. The only "amortized"R&D costs that are expensed and incurred in the same reporting period are those R&D costs in the first year of amortization.

The Court, however, has directed the Department to re-calculate R&D expenses for LGS in accordance with its Remand Order. Consequently, the Department recalculated LGS non-purchased R&D costs, to exclude non-purchased R&D costs that were incurred prior to 1993, and subsequently expensed in 1993. This changes the total R&D figure in the Department's calculations from [ * * * ] won to [ * * * ] won, and decreased the R&D percentage used in our calculations from [ * * * ] to [ * * * ] percent. Taking these adjustments into account, LGS's dumping margin for the period October 29, 1992 through April 30, 1994 remains unchanged at 0.00 percent.

RESULTS OF REMAND DETERMINATION

As a result of this redetermination, LGS's dumping margin for the period October 29, 1992 through April 30, 1994 is 0.00 percent. This rate is unchanged from the rate announced in the final results of the first review.

Richard W. Moreland
Acting Assistant Secretary
  for Import Administration

Date