Slip Op. 06-177
UNITED STATES COURT OF INTERNATIONAL TRADE
HYNIX SEMICONDUCTOR, INC.,
HYNIX SEMICONDUCTOR AMERICA,
INC.
Plaintiffs, Before: Richard W. Goldberg,
Senior Judge
v.
Court No. 03-00652
UNITED STATES,
Defendant,
and PUBLIC VERSION
QIMONDA NORTH AMERICA CORP.,
and MICRON TECHNOLOGY, INC.,
Defendant-
Intervenors.
OPINION
[ITC’s affirmative injury determination is sustained; judgment
entered for the ITC.]
Dated: December 7, 2006
Vinson & Elkins LLP (Daniel L. Porter, James P. Durling, Matthew
P. McCullough, Matthew R. Nicely) for Plaintiffs Hynix
Semiconductor Inc. and Hynix Semiconductor America Inc.
Peter D. Keisler, Assistant Attorney General; David M. Cohen,
Director; Ada E. Bosque, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice; James M. Lyons, General
Counsel, Andrea C. Casson, Assistant General Counsel, Office of
the General Counsel, U.S. International Trade Commission (Marc
A. Bernstein, Neal J. Reynolds) for Defendant United States.
Kelley Drye Collier Shannon (Kathleen W. Cannon) for Defendant-
Intervenor Qimonda North America Corp.
Court No. 03-00652 Page 2
King & Spalding LLP (Gilbert B. Kaplan, Cris R. Revaz, Daniel L.
Schneiderman, Jeffrey M. Telep) for Defendant-Intervenor Micron
Technology, Inc.
GOLDBERG, Senior Judge: Hynix commenced this case in September
of 2003 to challenge the final affirmative material injury
determination made by the United States International Trade
Commission (“ITC”) with respect to dynamic random access memory
semiconductors (“DRAMs”) of one megabit or above from the
Republic of Korea, published under DRAMs and DRAM Modules from
Korea, USITC Pub. 3616, Inv. No. 701-TA-431 (Aug. 2003)
(“Original Determination”). Currently before the Court are the
ITC’s remand results.
I. BACKGROUND
In April 2006, the Court sustained the ITC’s Original
Determination in all aspects but one. See Hynix Semicon., Inc.
v. United States, 30 CIT ___, 431 F. Supp. 2d 1302 (2006)
(“Hynix I”). The Court found that the ITC failed to support, by
substantial evidence, its finding that the unprecedented drop in
demand for downstream end-use products did not have such a
predominant effect in producing the material injury as to
prevent the subject imports from being a material cause of that
injury. See id. at ___, 431 F. Supp. 2d at 1321.
The ITC had found that the drop in demand for end-use
products such as personal computers, though slowing the pace of
DRAMs demand growth, did not render the subject imports a merely
ancillary or tangential cause. See Original Determination at
Court No. 03-00652 Page 3
36. The ITC claimed that record evidence demonstrated a lack of
any “clear correlation between growth of the DRAMs market and
price movements.” Id. To support that position, it cited to a
table (the “McClean Report”) that purported to document output
growth and price changes in the global DRAMs market from the
years 1990 to 2003. See id. n.163. The ITC interpreted the
McClean Report as evidence of a non-correlative relationship
between demand and price in the DRAMs industry. It then
concluded that since price and demand exhibited no correlation,
slowing demand growth due to falling demand for underlying end-
use products could not have been the sole cause for the
“unprecedented severity of the price declines that occurred from
2000 to 2001 and persisted through 2002 . . . .” Id. at 36.
The ITC did not, however, explain why the output data from the
McClean Report could be used to illustrate demand in the DRAMs
industry. The Court explained in Hynix I that this finding,
resting as it did on evidence consisting solely of the McClean
Report, was unsupported by substantial evidence and remanded the
question to the ITC for further explication. See Hynix I, 30
CIT at ___, 431 F. Supp. 2d at 1321.
In its amended remand order of May 30, 2006, the Court
provided clear instructions to the ITC on how to remedy the
evidentiary and explanatory deficiencies of its original
determination. First, the Court directed the ITC to explain how
the output growth/price movement relationship documented in the
Court No. 03-00652 Page 4
McClean Report can be used to articulate the relationship
between slowing demand growth and price movement. See Am.
Remand Order 1. If it was unable to provide such an
explanation, the Court instructed the ITC to “point to other
record evidence that shows the unprecedented drop in demand for
downstream end-use products did not have such a predominant
effect in producing the material injury as to prevent the
subject imports from being a material factor of that injury . .
. .” Id. In the event such evidence did not exist, the Court
instructed the ITC to “conduct further investigations to
determine the effect of the unprecedented drop in demand for
downstream end-use products . . . .” Id. 2. The ITC issued its
remand determination on July 11, 2006. See DRAMs and DRAM
Modules from Korea, USITC Pub. 3871, Inv. No. 701-TA-431 (July
2006) (“Remand Results”).
II. STANDARD OF REVIEW
The Court will remand the ITC’s determination if it is
“unsupported by substantial evidence on the record, or otherwise
not in accordance with law . . . .” 19 U.S.C. § 1516a(b)(1)(B)
(2000); see also Nippon Steel Corp. v. ITC, 345 F.3d 1379, 1381
(Fed. Cir. 2003) (holding that 19 U.S.C. § 1516a contemplates
only affirmances and remands, and never outright reversals of
agency determinations). Substantial evidence “does not mean a
large or considerable amount of evidence, but rather ‘such
relevant evidence as a reasonable mind might accept as adequate
Court No. 03-00652 Page 5
to support a conclusion.’” Pierce v. Underwood, 487 U.S. 552,
565 (1988) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197,
229 (1938)). It “requires ‘more than a mere scintilla,’ but is
satisfied by ‘something less than the weight of the evidence.’”
Altx, Inc. v. United States, 370 F.3d 1108, 1116 (Fed. Cir.
2004) (citations omitted) (quoting Atl. Sugar, Ltd. v. United
States, 744 F.2d 1556, 1562 (Fed. Cir. 1984); Matsushita Elec.
Indus. Co. v. United States, 750 F.2d 927, 933 (Fed. Cir.
1984)).
III. DISCUSSION
Nearly all the issues in this case have already been
adjudicated in Hynix I. As discussed above, that decision
sustained all but one of the ITC’s findings in its Original
Determination. Most importantly, the Court has already
determined that the subject imports contributed to the material
injury to the domestic industry. The one issue remaining is
whether the slowing DRAMs demand growth, precipitated by the
unprecedented drop in underlying demand for downstream products
such as personal computers, was so predominate as to render the
subject imports a merely ancillary or tangential cause of the
domestic industry’s material injury.
When a complaining party raises a potential alternative
cause for a domestic industry’s injury, the ITC’s causation
inquiry must broaden to analyze the effects of that putative
cause. In Hynix I, the Court explained the ITC’s burden:
Court No. 03-00652 Page 6
The ITC is charged with the burden of an earnest
investigation into whether other factors render the
subject imports a tangential, de minimis cause of the
domestic industry’s material injury. An affirmative
material injury determination does not rest on
substantial evidence when the ITC fails to analyze
compelling arguments that purport to demonstrate the
comparatively marginal role of subject imports in
causing that injury.
30 CIT at ___, 431 F. Supp. 2d at 1317.
In the Original Determination, the ITC posited, in essence,
that a lack of a clear and discernible correlation between price
and demand mooted the issue of slowing demand growth. If the
ITC had pointed to evidence that indeed price is not a function
of demand in the DRAMs market, then its determination would have
been sustained: after all, falling demand growth cannot be said
to predominate the causation analysis of a domestic industry’s
price woes if demand is not a primary determinant of price in
the industry. It is well beyond the Court’s discretion to
challenge the patent reasonableness of such an argument,
provided the evidence supports it.
However, in Hynix I the Court found the ITC’s discussion of
this factor inadequate due to the paucity of reliable evidence
suggesting that price and demand were not correlated. The ITC
aimed to elucidate the agency’s position on remand, and the
Court must now examine the ITC’s Remand Results. In those
Remand Results, the ITC draws on other record data in support of
its characterization of the non-correlative relationship between
price and demand in the DRAMs industry.
Court No. 03-00652 Page 7
A. For Purposes of This Case, the “Output” Data from the McClean
Report Is Devoid of Probative Value
As noted above, in its Original Determination, the ITC
supported its characterization of the non-correlative
relationship between price and demand by citing to the McClean
Report. That report consists of a two column table measuring
“price” and “output” over time. Because “output” refers to the
quantity of goods produced, and not demand or even the quantity
purchased or consumed, the citation’s relevance was unclear.
Though the Court issued explicit instructions to the ITC to
explain the table, the ITC has failed to provide an equally
clear response to the Court’s concern. Instead, in the Remand
Results the ITC continues to treat the “output” data as
indicative of consumption trends.
The ITC lists the McClean Report data in the Remand Results
and describes it as a “longer [data] series, which measures
worldwide DRAM bit consumption and pricing since 1990 . . . .”
Remand Results at 8. Again, the ITC cites to the McClean Report
data in a footnote:
We . . . observe that the longer time series data in the
record also fail to show a correlation between pricing
changes and changes in consumption. For example, prices
declined by 60 percent in 1997, where the rate of growth
of consumption was 21 percentage points higher than the
previous year, but declined by only 16 percent in 1999,
where the rate of growth of consumption was 11
percentage points lower than the previous year.
Id. at 10 n.40. At no point in the Remand Results does the ITC
endeavor to explain why the McClean Report’s output data can be
Court No. 03-00652 Page 8
utilized to illustrate a relationship between demand and prices.
Defendant-Intervenor Micron Technology, Inc. (“Micron”) contends
that “the ITC makes clear that the reference to ‘output’ growth
actually reflects consumption, (i.e., demand) growth” by citing
to footnote 40 of the Remand Results. Micron’s Comments 1. No
reasonable reading of that footnote could support Micron’s
proposition. The footnote evinces the ITC’s impression that the
McClean Report contains consumption data, but it does not even
purport to address the key issue: why does the ITC assume that
the McClean Report provides consumption data and not output
data?
There is no requirement that the ITC apply the strictures
of the Federal Rules of Evidence in the context of its material
injury investigations, see Tarnove v. Bentsen, 17 CIT 1324, 1326
(1993), but the absence of the specific guarantees of the
federal rules does not free the agency from the commonsense
requirement that its findings must be based on “evidence having
rational probative force.” Consol. Edison, 305 U.S. at 230.
Because the report tracks output data, its relevance to this
proceeding is not apparent barring some explanation to the
contrary. As the ITC has made no such explanation, the McClean
Report’s probative value as to the correlation of price and
demand is nil.1 The citation to the McClean Report was the
1
The ITC explains that it chose to rely on the McClean Report
because of the perceived objectivity of a third-party data set.
See Remand Results at 8 n.33; cf. also DRAMs and DRAM Modules
Court No. 03-00652 Page 9
linchpin support of the ITC’s determination that demand and
price are non-correlative in the DRAMs industry, see Original
Determination at 36 n.163. Unless the ITC can point to other
evidence, that determination cannot be said to rest on
substantial evidence.
B. The ITC Has, However, Cited Other Record Data That Bolster
Its Contention That Price and Demand Are Not Directly
Correlated in the DRAMs Industry
In its amended remand order, the Court instructed the ITC
that, in the event the ITC is unable to elucidate the relevance
of the McClean Report, it should “point to other record evidence
that shows the unprecedented drop in demand for downstream end-
use products did not have such a predominant effect in producing
the material injury as to prevent the subject imports from being
a material factor of that injury.” Am. Remand Order 2.
1. Other Record Evidence in the Form of Worldwide
Consumption Data Supports the ITC’s Claim That Demand
Is Not a Primary Determinant of DRAMs Prices
The record contains other evidence relating to world
consumption of DRAMs.2 The ITC references another data set
from Korea, USITC Pub. 3839 at 9, Inv. No. 701-TA-431 (Feb.
2006) (section 129 consistency determination). It appears the
only other available data were provided by Hynix, which was, of
course, an active participant in the investigation. While data
compiled by disinterested parties remains relatively free from
the shadow of suspicion, that evidence must, of course, actually
have a tendency to make some material fact more or less
probable, cf. Fed. R. Evid. 401.
2
The parties have devoted substantial briefing to a phantom
issue: whether domestic DRAMs consumption is a permissible proxy
for DRAMs demand. The Court did not remand that issue, and has
Court No. 03-00652 Page 10
(“Hynix worldwide consumption data”) provided by Hynix itself in
Hynix’s Prehearing Brief. See Remand Results at 8 n.33 (citing
Pl.’s Preh’rg Br. 62). Hynix cited the same data before the ITC
during the remand proceedings. See Pl.’s Agency Remand Br.,
Exs. 1-2. The Hynix worldwide consumption data were not,
however, cited or referred to directly in the ITC’s original
affirmative material injury determination.3 The data paint the
following picture: from 1995 to 1996, DRAMs demand growth,
measured by world consumption, was 77%; from 1996 to 1997,
growth was 98%; from 1997 to 1998, growth was 77%; from 1999 to
always assumed that the ITC’s practice of gauging demand by
measuring domestic consumption is permissible. At issue is the
demand for DRAMs, so the court will look to consumption of
DRAMs, and not consumption of end-use products, as being
indicative of DRAMs demand. Plaintiff’s contention that end-use
products are a more accurate proxy for demand is belied by its
own summary judgment brief, where it observed categorically:
“The key is that DRAM demand never actually drops; rather, the
rate of growth falls.” Pl.’s J. Agency R. Br. 39. Because end-
use product demand did drop, Hynix therefore was referring to
DRAMs consumption — and not end-use product consumption — as a
proxy for demand. The confusion is perhaps the product of the
Court’s instructions to the ITC to execute the causation
analysis in light of the “underlying drop in demand” for
“downstream end-use products.” Hynix I, 30 CIT at ___-__, 431
F. Supp. 2d at 1319-21; Am. Remand Order 2. In choosing such
language, the Court was not inviting the parties to re-brief the
question of what is an appropriate measure of DRAMs demand;
instead, the Court simply referred to the fact that both parties
agreed that the drop in demand for end-use products occasioned
the decline in DRAMs demand growth. See Pl.’s J. Agency R. Br.
(“The demand for DRAMs is a derived demand; that is, it is based
solely on the downstream demand for products that use DRAMs,
such as personal computers”); Pl.’s Agency Remand Br. 7; Def.’s
Mem. Opp. J. Agency R. 43.
3
The data was excluded because the McClean Report data was
perceived to be more objective. See supra note 1.
Court No. 03-00652 Page 11
2000, growth was 74%; from 2000 to 2001, growth was 60%; and
from 2001 to 2002, growth was 41%.4
The Hynix worldwide consumption data track trends in global
demand growth from 1996 to 2002, a shorter window than the
McClean Report, which reports “output” growth from 1990 to 2003.
However, the data largely mirror the McClean Report output data
for the years 1996 to 2002. The only significant deviation
between the two sets occurs in 2002, for which the Hynix
worldwide consumption data reports a demand growth number (41%)
that is 16% lower than the output number from the McClean Report
(49%).
The Hynix worldwide consumption data evince the same lack
of correlation between price and global demand that the ITC
claimed was evident in the McClean Report. For example, DRAMs
demand growth in both 1996 and 1999 was 77%. However, the price
changes for those periods, as indicated in the McClean Report,
were wildly divergent (negative 65.3% in 1996 and a mere
negative 12.5% in 1999). The data relating to the period of
investigation show that the deceleration of demand growth was
less severe in 2001 (74% growth in 2000 to 60% growth in 2001)
than in 2002 (60% growth in 2001 to 41% growth in 2002).
However, the price effects were much more pronounced in the
4
The Hynix worldwide consumption data measure global demand,
but both parties have indicated their acceptance of worldwide
demand data as indicative of general trends in U.S consumption.
See Remand Results at 8; Pl.’s Agency Remand Br. 7.
Court No. 03-00652 Page 12
former period (price declined 72.7% in 2001, and merely 33.3% in
2002). The price decline in 2001 was the worst in DRAMs
history. The fact that price rebounded significantly in 2002
despite the aggravated decline in demand growth undercuts
significantly Hynix’s contention that demand trends predominate
any analysis of price movements in the DRAMs industry. The ITC
reasoned that if demand trends were a cardinal determinant of
DRAMs prices, the 1999 price movements would have more closely
tracked those in 1996.
The domestic consumption data during the period of
investigation tell a similar story. The rate of demand growth
measured by apparent domestic consumption in 2000 was 67.2%.
See Remand Results at 7. In 2001, domestic demand growth was
48.6%, and in 2002 it fell further still to 27.4%. See id.
Thus, the 2002 price rebound occurred during a time when demand
growth was still plummeting. This data similarly testifies to a
lack of any direct and discernible relationship between demand
and price in the DRAMs industry.
2. The ITC Properly Explained Why Hynix’s Proffered
Variance Analysis Was Unreliable
Hynix prepared and presented to the ITC a variance
analysis5 purporting to measure the effects of the decreasing
5
According to Hynix, the ITC routinely utilizes a variance
analysis to isolate the effects of changes in price, volume, and
unit cost on U.S. producers’ profitability. The current
proposed variance analysis supposedly borrows from that
methodology.
Court No. 03-00652 Page 13
demand growth on the DRAMs selling price, given the price
elasticity estimated by the ITC. This variance analysis draws
on the record data, and claims to individuate the relative
importance of the decline in demand growth from the loss of
market share due to increased imports. Subject imports are
distinguished from nonsubject imports.
The variance analysis purportedly isolates four factors
that impact “the demand for U.S. producers’ shipments”: low
domestic growth relative to historic averages; low export growth
relative to historic averages; decreased market share from
nonsubject imports; and decreased market share from subject
imports. Pl.’s Agency Remand Br. 13. Assuming that growth in
demand for both domestic and export DRAMs would be around 75%
absent the decreased demand growth, the “direct” decline in
demand growth accounted for 65.8% of the decline in demand for
domestically produced DRAMs products. See id. 15. The loss of
market share to subject imports amounted to merely [ ]% of the
decline in demand for U.S. producers’ products. See id. The
remaining decline in demand for U.S. producers’ products was
attributed to the loss in market share to nonsubject imports.
Thus, “the direct decline in demand for all DRAMs alone had [
] more effect on U.S. producer shipments than did
subject imports.”6 Id. 15 (emphasis omitted). Hynix also
6
It appears that the variance analysis indicates that the
decline in demand growth (65.8%) was [ ], and not
[ ], as important as the loss in market share
Court No. 03-00652 Page 14
compared the [ ]% effect of subject imports to the [ ]%
combined effect of lost market share to nonsubject imports and
decline in direct demand growth. See id.
Furthermore, the variance analysis maps the demand growth
data onto the ITC’s price elasticity estimates to yield
information on the price effects of the slowing demand growth.
Positing a price elasticity of 0.4,7 Hynix concludes that the
price effects of the decrease in demand growth alone should have
amounted to a 74% decrease in price. Other record evidence
suggests that such a decline in fact occurred, with price
declines in individual products ranging from 68% to 84%. See
Pl.’s Agency Remand Br. 16. The implication is obvious: since
the predicted price effect of the decline in demand growth is
roughly equal to the actual price declines witnessed during the
period of investigation, the true cause of the price declines
was the decrease in demand growth. The final step in Hynix’s
analysis is stated succinctly at the end of this section of its
brief: “using the [ITC’s] own price elasticity estimate,
virtually all the price decline from 2000 to 2001 can be
directly attributable to the decline in demand for U.S. produced
DRAMs.” Id. 16 (emphasis omitted).
to subject importers ([ ]%).
7
The ITC estimated that the U.S. producers’ supply elasticity
fell in the range of 0.3 to 0.5. See Pl.’s Agency Remand Br. 16
(citing Original Determination at II-9).
Court No. 03-00652 Page 15
In the Remand Results, the ITC acknowledged the potential
probative value of Hynix’s variance analysis, noting that the
variance analysis “is pertinent to the scope of the proceedings
. . . .” Remand Results at 3 n.13. However, the ITC ultimately
disregarded the analysis on account of what it perceived to be
two fundamental flaws that undercut its probative value. First,
the ITC characterized the assumption that domestic DRAMs
producers could have sustained a 75% demand growth rate as
unrealistic. See id. at 14 n.54. Second, the ITC alleged
certain “computational difficulties with Hynix’s analysis.” Id.
The first claimed deficiency is supported by a citation to
the McClean Report, which the ITC insists is evidence of “annual
DRAM demand increases fluctuat[ing] considerably.” Id.
Moreover, “material collected for the [ITC’s] preliminary
determination . . . indicated that the DRAM demand increased by
substantially less than 75 percent in 2000 . . . .” Id. The
McClean Report, for the reasons stated above in Part III.A of
the Court’s decision, is devoid of probative value. However,
the 2000 demand growth data collected during the preliminary
determination creates problems for Hynix’s variance analysis.
The Remand Results cite the ITC’s estimate that domestic demand
grew by 67.2% during 2000. See id. at 7. Hynix ripostes by
citing the Hynix worldwide consumption data discussed at length
above. Looking exclusively at those data, Hynix is almost
correct that “for each of the . . . five years [before 2001] the
Court No. 03-00652 Page 16
DRAM demand growth rate was at [sic] least 75 percent.” Pl.’s
Comments 12 (emphasis omitted).8 Since the apparent U.S.
domestic consumption data relate to the domestic market, they
are more reliable than the Hynix worldwide consumption data.
Therefore, the citation to the Hynix worldwide consumption data
does not rebut the ITC’s position that the 75% growth assumption
— on which the entire variance analysis hinges — was unrealistic
in light of the significantly lower apparent U.S. consumption
growth (67.2%) in 2000.
Hynix also cites a comment made by Steve Appleton, CEO of
Micron, during a 2003 conference call with analysts. Mr.
Appleton, discussing the demand profile of the DRAMs industry,
said that “‘We have had a fundamental shift I think in the
demand profile. As you know, it historically ran at 75 percent
. . . .’” Pl.’s Comments 12 (quoting Micron Q3 Financial
Release Conf. Call, Pl.’s Post-Hr’g Br., Ex.13) (emphasis
omitted). Again, the ITC’s own investigation of the period
immediately preceding the 2001 downturn revealed that apparent
domestic consumption grew at 67.2%. It is hardly unreasonable
for the ITC to have relied on data from its own investigation
rather than the transcript of a conference call between a CEO
and Wall Street analysts covering his company.
The ITC also questions the computational accuracy of the
variance analysis. Specifically, the ITC claims that Hynix’s
8
Hynix is only “almost correct” because the Hynix worldwide
Court No. 03-00652 Page 17
analysis “assigns to demand declines reductions in shipments
that Hynix’s own calculations acknowledge were attributable to
increases in market penetration of subject and nonsubject
imports.” Remand Results at 14 n.54. The variance analysis
apportions the causation of the price declines to the various
factors by dividing the estimated number of total shipments lost
by the effect of a given factor (e.g., loss of domestic
shipments due to demand growth decline). Hynix derives the
estimate of total lost shipments by adding the number of
shipments lost on account of the four separate factors that the
variance analysis purports to individuate: (1) lost shipments
due to increased market share for subject imports, (2) lost
shipments due to increased market share for nonsubject imports,
(3) lost export shipments due to demand growth decline, and (4)
lost domestic shipments due to demand growth decline. The ITC
correctly points out that the figure representing lost domestic
shipments due to demand growth decline also includes lost
shipments due to the loss in market share. As a result, the
variance analysis exaggerates the relative effect of the demand
growth decrease and in the process deflates the effect of
increased import market share. A close examination of the
variance analysis confirms that this computational objection is
valid, and further undermines the foundation of the variance
analysis.
consumption data document a growth rate of 74% in 2000.
Court No. 03-00652 Page 18
In its brief before the ITC, Hynix claimed that “U.S.
producers’ U.S. shipments [in 2001] would have been 11,342,832
higher had consumption grown at its historical rate.”9 Pl.’s
Agency Remand Br. 14 (emphasis added). The 11,342,832 figure
was then added to the estimates for (1) lost export shipments
due to demand growth decline, (2) lost shipments due to
increased market share for nonsubject imports, and (3) lost
shipments due to increased market share for subject imports. As
noted above, in sum these quantities yielded an estimate of the
“total” loss of shipments for domestically-produced DRAMs in
2001, which amounted to 39,175,541 shipments. See id. 15.
The 11,342,832 figure itself was derived by measuring the
difference between actual domestic shipments for 2001 and likely
domestic shipments assuming continued growth of 75%. Ignoring
for the moment the problems associated with this growth
assumption, this computation holds constant the domestic
producers’ market share. Therefore, the figure represents (1)
the amount of shipments lost on account of decreased demand
growth; and (2) the amount of shipments lost on account of
increased market share for import products. Hynix incorrectly
summarized the analysis’ import, claiming that “U.S. shipments
would have been 11,342,832 higher had consumption grown at its
historical rate.” Id. 14. Rather, that assertion is subject to
a further qualification that touches on the core issue in this
9
The consumption figures are in billions of bits.
Court No. 03-00652 Page 19
case: the increased market share of imports, including subject
imports. The domestic industry could only have achieved that
number of shipments if the market grew at 75% and if the U.S.
producers’ preserved their competitiveness. Therefore, to treat
the 11,342,832 figure as indicative of only slowing demand
growth, and to then add separately the number of shipments lost
due to loss in market share, is to double-count the latter.
The 11,342,832 figure, because it fails to discount the
likely shipments in light of the decreased market share and U.S.
producer competitiveness, is thus a wholly unrealistic
estimation of what the 2001 market would look like absent the
decline in demand growth for DRAMs products. The resultant
price calculations derived from the variance analysis data are
similarly devoid of persuasiveness.
IV. CONCLUSIONS
Because the ITC has failed to establish the foundational
relevance of the McClean Report, the Court must disregard it.
On the other hand, pursuant to the Court’s earlier remand order,
the ITC has pointed to other record evidence that suggests that
demand and price are not directly correlative in the DRAMs
industry. The Court therefore finds that the ITC has supported
by substantial evidence its finding that the slowing growth of
demand does not so predominate the causation analysis as to
render the subject imports a mere ancillary cause of the
domestic industry’s woes.
Court No. 03-00652 Page 20
Moreover, the Court finds that the ITC properly disregarded
Hynix’s proposed variance analysis. The computational
inaccuracies, as well as the justifiable preference for record
data over the CEO’s growth predictions, place the ITC’s decision
to disregard the proposed variance analysis well within the
bounds of reasonableness.
The Court sustains the ITC’s Remand Results. Recalling
that the Court, in Hynix I, sustained all other challenged
aspects of the Original Determination, the Court must now enter
judgment in the ITC’s favor.
/s/ Richard W. Goldberg
Dated: December 7, 2006 Richard W. Goldberg
New York, New York Senior Judge