Hynix increases Eugene output.

Byline: From Register-Guard and news service reports

South Korea's Hynix Semiconductor Inc. has been quietly ratcheting up output at its Eugene memory-chip plant to avoid paying import tariffs imposed by the European Union and the United States, a Hynix spokesman in Korea said Thursday.

Hynix has been boosting productivity and output at the Eugene plant, and will continue to do so, up to the maximum capacity of the current plant, said Jung Soo Kim, a Hynix Semiconductor spokesman in Korea.

The Eugene plant - Hynix's only one in the United States - now has 1,100 employees, up from 950 employees as of late September.

Hynix plans to maintain that employment level, Kim said.

The EU and United States imposed duties on Hynix several years ago to counter South Korean government subsidies. The European duty, imposed for five years in 2003, stemmed from a complaint by Germany's Infineon Technologies AG, Europe's largest semiconductor maker.

Hynix is the world's second-largest memory-chip maker.

On Thursday, the EU imposed tighter restrictions on Hynix's memory chips to ensure that the import tariffs are paid, according to Bloomberg News.

The EU will apply the 34.8 percent anti-subsidy duty to memory boards that contain Hynix chips and are declared as being from countries other than South Korea.

``Special provisions are needed in order to ensure that the countervailing duty is levied,'' the 25-nation EU said in a decision to be published soon in the Official Journal.

The revised regulations ``won't have any impact on our business because we no longer make any of the products that relate to the revisions,'' said Hynix spokesman Park Hyun.

When the EU imposed the duty in 2003, it didn't specify that memory boards of dynamic random access memory chips, known as DRAM - the main memory used in personal computers - were subject to the measure.

Hynix has avoided about $236 million in annual EU duties because of the imprecise EU regulation, said Michael Schuette, a partner in Brussels with Freshfields Bruckhaus Deringer, who represents Infineon.

Under the new rules, the EU will apply the duty according to the number of Hynix chips on the modules.

DRAM modules typically have about 10 DRAM chips.

Hynix escaped the duties by exporting modules with some South Korean chips and the remainder being from other countries, Schuette said.

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