Hynix shares jump 7.5 percent after WTO ruling against Japanese import charge

2007-11-28

WTO이 일본 수입 관세를 딴지 걸어줘서 하이닉스 주가가 7.5% 올랐다고...

GENEVA: Shares of Hynix Semiconductor Inc. jumped 7.5 percent Thursday after a World Trade Organization appeals body ruled against Japan's punitive charges on imports of South Korean computer chips.

The overall decision Wednesday was mixed, however, with Korean diplomats declaring themselves "not dissatisfied" and Japanese officials saying they were "pleased" by some of the findings.

The sensitive dispute concerns a 27.2-percent charge Tokyo levies on imports of DRAM, or dynamic random access memory, chips made by South Korea's Hynix.

The chips are widely used in personal computers and are Hynix's mainstay product.

Investors cheered the news, pushing Hynix shares 7.5 to 24,500 won (US$26; €18) at the close of trading Thursday in Seoul.

"This is good news for Hynix," Lee Min-hee, an analyst at Dongbu Securities, told Dow Jones Newswires. "Japan accounts for about 10 percent of Hynix chip sales and this ruling will spare it extra expenses for such tariffs, which in turn will boost its profit."

The initial WTO ruling in July was claimed as a victory by Seoul, even though the panel refused to order Tokyo to scrap the fees outright. Japan accuses Hynix of benefiting from subsidies to sell the chips at below-cost prices, causing harm to Japanese chipmakers.

The WTO's top court told Japan on Wednesday to bring the fees into compliance with global commerce agreements. But the 102-page decision also rejected some earlier findings that had gone against Tokyo.

"It's a very mixed result," Japanese trade negotiator Koji Saito said. "We are pleased that some of the previous findings were reversed."

Jae-kown Kang, an official with Korea's WTO mission in Geneva, said, "We are not dissatisfied with the ruling." He declined to comment further because the government in Seoul was planning to make an announcement soon.

South Korea has argued that the duties are discriminatory and the WTO appeals body backed its claims that Japan wrongly concluded that Hynix gained an unfair advantage through certain government payments. On other payments, the WTO has chided Japan for wrongly calculating the amount of benefit Hynix enjoyed.

While the WTO has yet to order Japan to eliminate the fees, the two rulings imply that Tokyo will at least have to recalculate the duty it introduced in January 2006

Hynix's chips and the alleged subsidies paid by South Korea have also caused disputes with the United States and the European Union. Hynix, which nearly collapsed under mountains of debt several years ago, was twice saved — in October 2001 and December 2002 — by its creditor banks, which were majority-owned by the government.

The WTO ruled in 2005 that some of Seoul's financial support for Hynix was illegal, citing restructuring loans and debt-for-equity swaps made by state-controlled banks.

Japan's tariff, which applies to DRAM chips manufactured in South Korea until 2011, was the first imposed by Tokyo to counter alleged subsidies by a foreign government. It was also the first punitive duty levied by Tokyo on a high-tech product.