Japan to Scrap Punitive Hynix Tariffs

Japan said on Monday it will cut a punitive import tariff on memory chips made by Hynix Semiconductor of Korea, ending a dispute that has damaged trade relations between the countries for the last three years.

The Ministry of Economy, Trade and Industry said that it would lower Japan's import tariff on Hynix's Dynamic Random Access Memory chips from the penalty rate of 27.2 per cent down to 9.1 per cent on April 23.

Japan's Elpida Memory, the world's third largest D-Ram maker, may lose some sales because of the increased competition.

Japan, the US and the European Union all imposed tariffs on Hynix chips after the company was bailed out by the Korean government in 2001 and 2002, arguing that this amounted to unfair state aid.

The EU lifted its tariffs at the end of 2007 and the US in August last year, prompting accusations from Korea that Japan was dragging its feet.

DRAM makers have been reporting heavy losses because of a global slump in prices and demand that has only recently started to improve. Hynix reported its fifth consecutive quarterly loss for the last three months of 2008.

Hynix shares fell by 0.7 per cent to Won 13400. Shares in Elpida were up by 12 per cent on continued excitement about its prospects as technology supplier to the Taiwanese DRAM sector.