Hynix hit by 33% European DRAM punishment

MEMORY CHIPS imported to European Union countries will attract a tariff of 33 per cent, wires reported.

Hynix is taxed with being kept in business by the South Korean government, which officials at both the European Union and the USA describe as unfair subsidies.

Earlier this month the US Commerce Dept decided that Hynix memory products should have an import duty of 58%.

Samsung - another South Korean memory company - is also accused of being unfairly subsidised by the South Korean government but it is attracting duties of less than one per cent.

Why is this? It's because Samsung is profitable while Hynix is terribly debt laden, particularly after its take over of LG Semicon some years ago.

The allegations are that the South Korean government could have stepped in and caused the directors of Hynix to get the house in order much earlier.

What happened is that Micron attempted to get Hynix for a song, that deal fell through, and eventually the board of directors of the Korean company quit, to be taken over by creditors.

But we never hear a word about trade protectionism these days. Micron, a US company - and Infineon, a German company, have also been hard hit by the slump in memory demand and prices.

Those Dramurai allege that Hynix should face the same free market conditions as they're currently suffering. The German Chancellor and the US president aren't going to step in and help their home industries any time soon. They have to stand or fall by market rules, it appears.

There's some hope - and this is a subtext on Micron's and Infineon's behalf - that Hynix disappearing will suddenly make everything so much better again. But, in the climate of the times, we believe that's all it is. Some hope. µ