Taiwan Semiconductor Industry Ass'n v. United States

Slip Op. 00-113
UNITED STATES COURT OF INTERNATIONAL TRADE

TAIWAN SEMICONDUCTOR
INDUSTRY ASSOCIATION, ET AL.,

Plaintiffs,

and BEFORE: Pogue, Judge

MOTOROLA, INC., Court No. 98-05-01460

Plaintiff-Intervenor,

v.

UNITED STATES,

Defendant,

and

Micron Technology, Inc.

Defendant-Intervenor.

[The International Trade Commission’s second remand determination
is affirmed.]

Decided: August 29, 2000

White & Case, LLP (Christopher F. Corr, Richard G. King, and Lyle
Vander Schaaf) for Plaintiffs.

Lyn M. Schlitt, General Counsel; James A. Toupin, Deputy General
Counsel; Michael Diehl, Office of the General Counsel, U.S.
International Trade Commission, for Defendant.

Hale and Dorr LLP (Gilbert B. Kaplan, Michael D. Esch, Paul W.
Jameson, and Cris R. Revaz) for Defendant-Intervenor.
Court No. 98-05-01460 Page 2

OPINION

Pogue, Judge: Before the Court is the U.S. International Trade

Commission’s ("Commission") second remand determination concerning

static random access memory semiconductors ("SRAMs") from Taiwan.

In its first determination, the Commission concluded that the U.S.

SRAM industry was materially injured by reason of imports of SRAMs

from Taiwan that were sold at less than fair value ("LTFV"). See

Static Random Access Memory Semiconductors from the Republic of

Korea and Taiwan, Inv. Nos. 731-TA-761 & 762 (Final)(List 2, Doc.

395)(Apr. 9, 1998) at 37-38 ("Final Determination").1 The Court

could not sustain the Commission’s affirmative injury

determination, however, because the Commission did not adequately

explain how it avoided attributing to the subject imports the

harmful effects from other known sources of injury. See Taiwan

Semiconductor Indus. Ass’n v. United States, 23 CIT , , 59 F.

Supp. 2d 1324, 1336 (1999)("Taiwan I"). Therefore, we remanded the

Commission’s affirmative determination for reconsideration

consistent with the Court’s opinion. See id.

On remand, the Commission again determined that the domestic

1
List 1 consists of the documents within the public portion
of the record made before the Commission. List 2 consists of the
documents within the confidential portion of the same record.
Court No. 98-05-01460 Page 3

industry was materially injured by reason of SRAMs from Taiwan.

See Commission’s Determ. on Remand (List 2, Doc. 406)(Aug. 30,

1999) at 1 ("First Remand Determination"). Absent greater

explanation, however, the Court again could not sustain the

Commission’s remand determination. See Taiwan Semiconductor Indus.

Ass’n. v. United States, 24 CIT , , slip op. 00-37 at 55

(Apr. 11, 2000)("Taiwan II").2 Therefore, we remanded the

Commission’s first remand determination for reconsideration

consistent with the Court’s opinion. See id.

In its second remand determination, the Commission now

determines that, pursuant to section 735(b) of the Tariff Act of

1930, as amended, 19 U.S.C. § 1673d(b)(1994), "an industry in the

United States is not materially injured or threatened with material

injury by reason of imports of [SRAMs] from Taiwan that have been

found by the Department of Commerce to be sold in the United States

at [LTFV]." Commission’s Determ. on Remand (List 2, Doc. 411)(June

23, 2000) at 1 ("Second Remand Determination").

In reviewing the Commission’s second remand determination, we

are presented with the following issues: (1) whether the Commission

conducted its second remand in accordance with this Court’s remand

2
Familiarity with the Court’s previous decisions in Taiwan I
and Taiwan II is presumed.
Court No. 98-05-01460 Page 4

order in Taiwan II and otherwise in accordance with law; and (2)

whether the Commission’s negative determination on remand is

supported by substantial evidence.

Standard of Review

The Court must sustain the Commission’s second remand

determination unless it is "unsupported by substantial evidence on

the record, or otherwise not in accordance with law[.]" 19 U.S.C.

§ 1516a(b)(1)(B)(i).

Discussion

I. Did the Commission conduct its second remand proceedings in
accordance with this Court’s remand order in Taiwan II and
otherwise in accordance with law?

The statute directs the Commission to "make a final

determination of whether . . . an industry in the United States .

. . is materially injured, or . . . threatened with material injury

. . . by reason of [LTFV] imports . . . ." 19 U.S.C. § 1673d(b).

The six commissioners comprising the Commission vote to make this

determination. See Taiwan II, 24 CIT at , slip op. 00-37 at 4.

As more fully described in Taiwan II, the details surrounding the

Commission’s voting record in its investigation of SRAMs from

Taiwan are rather unique. See id. at , slip op. 00-37 at 4-6.
Court No. 98-05-01460 Page 5

Due to vacancies and a recusal, only two commissioners actually

voted in the original determination. Commissioner Bragg found that

the U.S. industry was materially injured by reason of LTFV imports

of SRAMs from Taiwan, with Commissioner Miller dissenting.3 See

Final Determination at 33 n.168. Accordingly, Commissioner Bragg’s

decision constituted an affirmative determination of the Commission

pursuant to 19 U.S.C. § 1677(11).4

"By the time of the remand, three new members had been

appointed to the Commission: Commissioner Askey, Commissioner

Koplan, and Commissioner Hillman." Taiwan II, 24 CIT at , slip

op. 00-37 at 5. Nevertheless, only Commissioner Bragg prepared

written views on remand. See First Remand Determination at 1 n.1.

"The Commission . . . submit[ted] [Commissioner] Bragg’s remand

views to the Court . . . as its ‘Views on Remand[.]’" Id.

In Taiwan II, Plaintiffs argued that the Commission’s first

remand determination was unlawful because it only constituted the

3
From the date of the original determination to the present,
several commissioners have served as Chairman and Vice Chairman
of the Commission. For the sake of simplicity, we refer to all
commissioners by the title "Commissioner."
4
That provision states, "If the Commissioners voting on [an
injury] determination . . . are evenly divided as to whether the
determination should be affirmative or negative, the Commission
shall be deemed to have made an affirmative determination." 19
U.S.C. § 1677(11).
Court No. 98-05-01460 Page 6

views of Commissioner Bragg. See 24 CIT at , slip op. 00-37 at

6. Plaintiffs maintained that all eligible commissioners should

have participated in the remand determination, because the

applicable statute, case law, and this Court’s remand order in

Taiwan I all compelled an institutional response. See id.

Upon reviewing 19 U.S.C. § 1516a(c)(3), the relevant case law,

and our own remand order in Taiwan I, we agreed that all eligible

commissioners should have participated meaningfully in the remand.

See id. at , slip op. 00-37 at 9. That is, the commissioners

should have adequately considered the record evidence and the

decision’s merits before submitting the remand views of

Commissioner Bragg as an institutional response of the Commission.

See id. at , slip op. 00-37 at 9-16. Because there was no clear

evidence demonstrating that the full Commission had not

meaningfully participated in the remand, however, the Court

presumed that the commissioners properly discharged their official

duties. See id.5

5
"The presumption of regularity supporting the acts of
agency officials mandates that, ‘in the absence of clear evidence
to the contrary, courts presume that they have properly
discharged their official duties.’" Taiwan II, 24 CIT at ,
slip op. 00-37 at 9-10 (quoting United States v. Chemical
Foundation, Inc., 272 U.S. 1, 14-15 (1926)); see also United
States v. Morgan, 313 U.S. 409, 422 (1941). "[F]ederal courts
have consistently recognized that challengers must satisfy a high
Court No. 98-05-01460 Page 7

Nevertheless, although Plaintiffs’ arguments did not overcome

the presumption of regularity supporting the acts of agency

officials, see id. at , slip op. 00-37 at 11, 15-16, the Court

noted, "[B]ecause we are remanding the decision for the reasons

explained below, Plaintiffs will, in any event, be afforded the

full Commission’s reconsideration of the merits of the injury

determination[,]" id. at , slip op. 00-37 at 16-17.

It is now clear, however, that the new commissioners did not

meaningfully participate in the first remand determination. In a

motion for extension of time, Defendant stated that, in the first

remand proceeding, the new "commissioners did not undertake to

themselves reach independent determinations based on a review of

the substantive record." Consent Mot. of Def. for Extension of

Time to Resp. to Ct.’s Remand Order (Apr. 21, 2000) at 2; see also

Second Remand Determination at 2-3.

In the second remand determination, "all participating

[c]ommissioners engaged in a substantive review of the record."

Second Remand Determination at 3. Commissioners Hillman, Koplan,

burden in order to rebut the presumption that agency officials
have adequately considered the issues in making a final decision,
including their reading and understanding of the record
evidence." Id. at , slip op. 00-37 at 10 (citations omitted).
Court No. 98-05-01460 Page 8

and Okun adopted,6 with some elaboration, the negative material

injury and threat determinations made by Commissioner Miller in her

dissent issued with the original final determination.7 See id.

Commissioner Miller reaffirmed her original views offered in her

dissent. See id. Commissioner Bragg maintained her finding that

the domestic industry was materially injured by reason of the

Taiwanese subject imports and dissented. See id. n.8. Therefore,

in its second remand determination, the Commission determined, by

a four to one margin, that the domestic industry was not materially

injured or threatened with material injury by the Taiwanese

imports.

Defendant-Intervenor, Micron Technology, Inc. ("Micron"), now

argues that the Commission’s second remand determination

"constituted an improper de novo review of its Final Determination

and thereby exceeded the parameters of the Court’s second remand

6
As long as they meaningfully participate in the
determination, "it is appropriate for commissioners to adopt one
another’s views." Taiwan II, 24 CIT at , slip op. 00-37 at 12
(citation omitted). As noted above, the Commission majority has
indicated that, in conducting the second remand determination,
the commissioners engaged in a substantive review of the record.
Accordingly, it was appropriate for the new commissioners to
adopt Commissioner Miller’s views.
7
By the date of the second remand, new Commissioner Okun had
begun serving her term; Commissioner Crawford’s term had expired;
and Commissioner Askey had recused herself. See Second Remand
Determination at 2-3.
Court No. 98-05-01460 Page 9

instructions in Taiwan II, violated the law of the case, and

violated Micron’s right to due process." Cmts. of Micron in Opp’n

to Commission’s Second Remand Determination ("Micron Cmts.") at 4-

5.

According to Micron, in Taiwan II, the Court sustained the

First Remand Determination in nearly all respects, only remanding

"two fairly narrowly-drawn issues" for further explanation. See

id. at 5-7. Micron is correct that the Court indicated that it

could not sustain two findings absent greater explanation. We

stated that we could not, without more, "conclude that the record

as a whole support[ed] the Commission’s apparent finding on remand

that non-subject imports were not significantly competitive in the

market segment in which domestic and Taiwanese SRAMs were

concentrated." Taiwan II, 24 CIT at , slip op. 00-37 at 43. We

also held that, "inasmuch as the Commission’s determination that

the subject imports had significant price depressing effects

relie[d] on its market segment finding, as explained, the Court

[could not] sustain this determination." Id. at , slip op. 00-

37 at 46. In addition, we could not sustain the Commission’s

conclusion "that the instances of lost revenues for product 5 had

a significant negative impact on the domestic industry’s operating

income" absent an explanation of how it was reasonable to rely on
Court No. 98-05-01460 Page 10

certain allegations in confirming lost revenues. Id. at , slip

op. 00-37 at 53.

Micron is incorrect, however, insofar as it asserts that the

Court’s remand order in Taiwan II was necessarily limited to these

two issues. Rather, in expressing our inability to sustain the

Commission’s affirmative injury determination absent greater

explanation of the market segment and lost revenue findings, we

invited the Commission to reconsider the merits of its

determination. See id. at , slip op. 00-37 at 55 ("Accordingly,

the Commission’s determination is remanded for reconsideration

consistent with this Court’s opinion.")(emphasis added). "[The]

Court was free, within reasonable limits, to set the parameters of

the remand" to the Commission. Trent Tube Div. v. Avesta Sandvik

Tube AB, 975 F.2d 807, 814 (Fed. Cir. 1992). Moreover, "[t]he

purpose of a remand generally is to require the agency to explain

its determination or where appropriate, correct its determination."

Trent Tube Div. v. United States, 14 CIT 780, 781 n.1, 752 F. Supp.

468, 470 n.1 (1990), aff’d, 975 F.2d 807 (Fed. Cir. 1992). Based

on the remand order in Taiwan II, the Commission had discretion to

reconsider the merits of the injury determination.

Of much greater importance, however, is the fact that,

contrary to our presumption in Taiwan II, all eligible
Court No. 98-05-01460 Page 11

commissioners did not meaningfully participate in the Commission’s

first remand determination. See supra p. 7. Therefore, in

conducting the second remand determination, the eligible

commissioners had an obligation to review the record evidence and

make informed conclusions regarding the determination’s merits in

accordance with 19 U.S.C. § 1516a(c)(3), precedent, and the Court’s

remand orders. See Taiwan II, 24 CIT at , slip op. 00-37 at 7-

9. As we stated in Taiwan II, despite application of the

presumption of regularity, Plaintiffs would in any event "be

afforded the full Commission’s reconsideration of the merits of the

injury determination[,]" since we were remanding the first remand

determination. Id. at , slip op. 00-37 at 16-17. Therefore,

contrary to Micron’s assertion, the new commissioners had a duty to

evaluate the merits of the injury determination de novo, reviewing

the statutory factors prescribed in 19 U.S.C. § 1677(7)(B), (C),

(F), rather than limiting themselves to the two narrow findings

that required greater explanation.

In addition, Micron argues that, by "failing to respect the

Court’s disposition of the issues addressed in Taiwan I and Taiwan

II, the Commission subverted the purpose of judicial review and

violated the law of the case." Micron Cmts. at 13. "The law of

the case doctrine holds that ‘a decision on an issue of law made at
Court No. 98-05-01460 Page 12

one stage of a case becomes binding precedent to be followed in

successive stages of the same litigation.’" Chung Ling Co., Ltd.

v. United States, 17 CIT 829, 836, 829 F. Supp. 1353, 1360

(1993)(quoting 1B James W. Moore et al., Moore’s Federal Practice

¶ 0.404[1] (2d ed. 1992)). Micron argues that, because the Court

sustained many of the findings in the original and first remand

determinations as supported by substantial evidence in Taiwan II,

the Commission cannot now reach the opposite conclusions in its

second remand determination. See Micron Cmts. at 14.

Micron’s "law of the case" argument is inapposite to the

present situation. In Taiwan II, we did not hold that certain of

the conclusions in the first determination were correct as a matter

of law. Rather, we held that certain conclusions were supported by

substantial evidence and were otherwise in accord with law. Such

a holding "is not necessarily inconsistent with a holding that the

opposite conclusion[s] [were] also supported by substantial

evidence and otherwise in accord with law." Trent Tube, 975 F.2d

at 814. "[T]he possibility of drawing two inconsistent conclusions

from the evidence does not prevent an administrative agency’s

finding from being supported by substantial evidence." Consolo v.

Federal Maritime Comm’n, 383 U.S. 607, 620 (1966). Therefore, the

"law of the case" doctrine does not apply to this case. See Trent
Court No. 98-05-01460 Page 13

Tube, 975 F.2d at 814.

Finally, Micron submits that, by conducting a de novo review

of the full merits of the injury determination in the second

remand, the Commission deprived Micron of due process. See Micron

Cmts. at 14-15. "If the Commission considered it necessary to

reconsider all issues in the proceeding," Micron argues, "it should

have: (1) provided an opportunity for the parties to fully brief

all issues that the Commission would be addressing in its [second

remand determination] and (2) held a hearing before the full

Commission to allow parties to provide their views on the issues

raised in a de novo review." Id. at 14-15.

In the administrative proceedings leading up to the original

determination, however, Micron already had the opportunity to

submit briefs to the Commission regarding whether SRAMs from Taiwan

had materially injured the domestic industry. As these documents

were included in the administrative record, the new commissioners

surely had access to Micron’s views of the case, and the Court

presumes the Commission considered them in conducting its second

remand determination. Cf. Taiwan II, 24 CIT at , slip op. 00-37

at 43 ("The Court presumes the Commission considered all of the

evidence in the record.")(citation omitted). Moreover, it was not

necessary for the Commission to hold a new hearing regarding the
Court No. 98-05-01460 Page 14

merits of the injury determination; the new commissioners had the

benefit of the record transcript of the original hearing concerning

the merits, see Feb. 18, 1998, Hearing Tr. (List 1, Doc. 252), and

the Court presumes they considered this record evidence. See Grupo

Industrial Camesa v. United States, 18 CIT 461, 464, 853 F. Supp.

440, 443 (1994)("‘[A] member of an administrative agency who did

not hear oral argument may nevertheless participate in the decision

where he has the benefit of the record before him.’")(quoting

Gearhart & Otis, Inc. v. SEC, 348 F.2d 798, 802 (D.C. Cir. 1965)),

aff’d, 85 F.3d 1577 (Fed. Cir. 1996). Therefore, the Commission

did not violate on remand whatever due process rights Micron may

have.

For the foregoing reasons, the Court concludes that the

Commission conducted its second remand proceedings in accordance

with the remand order in Taiwan II and in accordance with law.

II. Is the Commission’s negative injury determination on remand
supported by substantial evidence and otherwise in accordance
with law?

A. Present Material Injury

In its second remand determination, the Commission concludes

that the U.S. SRAM industry was not materially injured by reason of

the Taiwanese imports. See Second Remand Determination at 1. "The

term ‘material injury’ means harm which is not inconsequential,
Court No. 98-05-01460 Page 15

immaterial, or unimportant." 19 U.S.C. § 1677(7)(A). "In

examining ‘whether [the subject] imports have caused material

injury to a domestic industry,’ the Commission is required under 19

U.S.C. § 1677(7)(B) to consider three factors: (1) the volume of

the subject imports; (2) the effect of the subject imports on

prices of domestic like products; and (3) the impact of the subject

imports on domestic producers of like products."8 9
Taiwan II, 24

8
In addition, the Commission "may consider such other
economic factors as are relevant to the determination regarding
whether there is material injury by reason of imports." 19
U.S.C. § 1677(7)(B)(ii).
9
"The Commission evaluates the volume and price effects of
the subject imports and their consequent impact on the domestic
industry by applying the standards set forth in 19 U.S.C. §
1677(7)(C)." Taiwan II, 24 CIT at , slip op. 00-37 at 19
(citations omitted). The relevant portions state:

(i) Volume

In evaluating the volume of imports of
merchandise, the Commission shall consider whether
the volume of imports of the merchandise, or any
increase in that volume, either in absolute terms
or relative to production or consumption in the
United States, is significant.

(ii) Price

In evaluating the effect of imports of such
merchandise on prices, the Commission shall
consider whetherB

(I) there has been significant price
Court No. 98-05-01460 Page 16

underselling by the imported merchandise
as compared with the price of domestic
like products of the United States, and

(II) the effect of imports of such
merchandise otherwise depresses prices to
a significant degree or prevents price
increases, which otherwise would have
occurred, to a significant degree.

(iii) Impact on affected domestic industry

In examining the impact required to be considered
under subparagraph (B)(i)(III), the Commission
shall evaluate all relevant economic factors which
have a bearing on the state of the industry in the
United States, including, but not limited toB

(I) actual and potential decline in
output, sales, market share, profits,
productivity, return on investments, and
utilization of capacity,

(II) factors affecting domestic prices,

(III) actual and potential negative
effects on cash flow, inventories,
employment, wages, growth, ability to
raise capital, and investment,

(IV) actual and potential negative
effects on the existing development and
production efforts of the domestic
industry, including efforts to develop a
derivative or more advanced version of
the domestic like product, and

(V) in a proceeding under [19 U.S.C. §§
1673-1673h], the magnitude of the margin
Court No. 98-05-01460 Page 17

CIT at , slip op. 00-37 at 18-19 (quoting Gerald Metals, Inc. v.

United States, 132 F.3d 716, 719 (Fed. Cir. 1997)). "Thus, after

assessing whether the volume, price effects, and impact of the

subject imports on the domestic industry are significant, the

statutory ’by reason of’ language implicitly requires the

Commission to ’determine whether these factors as a whole indicate

that the [subject] imports themselves made a material contribution

to the injury.’"10 Taiwan I, 23 CIT at , slip op. 00-37 at 21

(quoting Gerald Metals, Inc. v. United States, 22 CIT , , 27

F. Supp. 2d 1351, 1355 (1998)); see also 19 U.S.C. § 1673d(b)(1).

Accordingly, "the Commission must examine other factors to ensure

that it is not attributing injury from other sources to the subject

imports." Statement of Administrative Action, H.R. Doc. No. 316,

of dumping.

The Commission shall evaluate all relevant
economic factors described in this clause within
the context of the business cycle and conditions
of competition that are distinctive to the
affected industry.

19 U.S.C. § 1677(7)(C).
10
The presence or absence of any factor is not necessarily
dispositive to a finding of material injury. See 19 U.S.C. §
1677(7)(E)(ii). The Commission has discretion to weigh the
significance of each factor in light of the circumstances. See
Iwatsu Elec. Co., Ltd. v. United States, 15 CIT 44, 49, 758 F.
Supp. 1506, 1510-11 (1991).
Court No. 98-05-01460 Page 18

103rd Cong., 2nd Sess. (1994), reprinted in Uruguay Round Agreements

Act, Legislative History, Vol. VI, at 851-52.11

1. Volume

The statute directs the Commission to determine "whether the

volume of [the subject imports], or any increase in that volume,

either in absolute terms or relative to production or consumption

in the United States, is significant." 19 U.S.C. § 1677(7)(C)(i).

In the second remand determination, the Commission majority

adopted Commissioner Miller’s dissenting views to the original

affirmative determination. See Second Determination at 4. The

Commission stated,

[I]f considered apart from the other factors we are
required to consider, the absolute increase in the volume
of the subject imports is significant. When evaluated in
the context of the conditions of competition, however,
the volume of subject imports, and increase in volume,
are not sufficient to demonstrate that the subject
imports themselves made a material contribution to any
injury experienced by the domestic industry.

Id.

In its second remand determination, the Commission did not

specify which conditions of competition influenced its analysis.

11
The "by reason of" causation standard of 19 U.S.C. §
1673d(b) is more thoroughly set out in Taiwan I, 23 CIT at ,
59 F. Supp. 2d at 1326-31, and Taiwan II, 24 CIT at , slip op.
00-37 at 17-23.
Court No. 98-05-01460 Page 19

Nevertheless, Commissioner Miller elaborated on the context of the

conditions of competition in her original statement of her views.

Miller noted that, during the period of investigation ("POI"),

"U.S. apparent consumption of SRAMs increased substantially . . .

." First Determination at 39 (Comm’r Miller, dissenting). "In the

context of this growing market," Miller continued, "U.S. SRAM

producers lost considerable market share to imported SRAMs." Id.

at 40. Based on the record Miller concluded, however, that the

domestic industry lost market share "overwhelmingly to non-subject

imports, rather than to subject imports from Taiwan." Id.

Substantial evidence supports these findings.12 See Staff Report

(List 2, Doc. 34) at IV-9, Table IV-4 ("Staff Report"). Because

there was "little gain in market share attributable to [the]

subject imports[,]" Miller concluded that the increase in Taiwanese

imports was not significant in relative terms. Final Determination

at 40 (Comm’r Miller, dissenting).

Section 1677(7)(C)(i) affords the Commission the discretion

"to analyze the volume of imports in either an absolute or relative

12
Over the POI, the Taiwanese imports’ market share
increased by just over 2%, while the non-subject imports gained
just under 15% of the U.S. SRAM market. See Staff Report at IV-
9, Table IV-4. Moreover, the non-subject imports held a much
greater share of the U.S. market throughout the POI. See id.
Court No. 98-05-01460 Page 20

sense depending upon what is appropriate under the circumstances."

USX Corp. v. United States, 12 CIT 844, 848, 698 F. Supp. 234, 238

(1988). In Taiwan I, the Court held that substantial evidence

supported the conclusion that the subject imports’ absolute

increase over the POI was significant. See 23 CIT at , 59 F.

Supp. 2d at 1331. Nevertheless, given the substantial record

evidence indicating that U.S. consumption also increased

substantially, see Staff Report at IV-7, Table IV-3, and that non-

subject imports greatly exceeded the Taiwanese SRAMs in terms of

both absolute and relative increases in volume, see id. at IV-7,

Table IV-3, and at IV-9, Table IV-4, it was reasonable for the

Commission to evaluate the significance of the subject imports in

relative terms. Because substantial evidence supports the

conclusion that the volume of the subject imports was not

significant relative to U.S. consumption, it was reasonable for the

Commission to conclude in its second remand determination that the

volume of the subject imports lacked significance overall.

In rebuttal, Micron argues, "Nowhere does the statute allow

the Commission to negate the significance of import volume based on

conditions of competition. The statute requires the significance

of import volume be assessed solely in terms of increases

considered on an absolute or relative basis." Micron Cmts. at 18.
Court No. 98-05-01460 Page 21

Micron is incorrect. First, the conditions of competition that the

Commission largely referred to were the substantial increase in

U.S. apparent consumption and the much greater market share held by

the non-subject imports. See Final Determination at 39-40.

Section 1677(7)(C)(i) clearly allows the Commission to take such

factors into account in determining whether the volume of subject

imports is significant relative to U.S. consumption. See Taiwan I,

23 CIT at , 59 F. Supp. 2d at 1332 n.12. Furthermore, the

Commission may consider the broader conditions of competition

affecting the domestic industry in evaluating the significance of

the volume of subject imports. See Angus Chemical Co. v. United

States, 20 CIT 1255, 1266, 944 F. Supp. 943, 952-53 (1996)("The

Commission evaluates import volume ‘in light of the ‘conditions of

trade, competition, and development regarding the industry

concerned.’‘")(quoting General Motors Corp. v. United States, 17

CIT 697, 711, 827 F. Supp. 774, 787 (1993)), aff’d, 140 F.3d 1478

(Fed. Cir. 1998); see also S. Rep. No. 96-249, 96th Cong., 1st Sess.

at 88 ("The significance of the various factors affecting an

industry will depend upon the facts of each particular case.").

Therefore, substantial evidence supports the Commission’s

conclusion on second remand that the subject imports’ volume was

not significant.
Court No. 98-05-01460 Page 22

2. Price Effects

The statute provides that, in evaluating the effect of the

subject imports on domestic prices,

[T]he Commission shall consider whether--(I) there has
been significant price underselling by the imported
merchandise as compared with the price of domestic like
products of the United States, and (II) the effect of
imports of such merchandise otherwise depresses prices to
a significant degree or prevents price increases, which
otherwise would have occurred, to a significant degree.

19 U.S.C. § 1677(7)(C)(ii).

In its second remand determination, the Commission majority

adopted and elaborated upon Commissioner Miller’s discussion of

price effects from her dissenting views to the original affirmative

determination. See Second Remand Determination at 4. The

Commission found that "substantial evidence support[ed] the

conclusion that price underselling by the subject imports was

significant." Second Remand Determination at 4 n.9. Nevertheless,

the Commission concluded that the Taiwanese imports did not have

significant price depressing or suppressing effects. See id.; see

also BIC Corp. v. United States, 21 CIT 448, 458, 964 F. Supp. 391,

401 (1997)("Evidence of underselling alone is legally insufficient

to support an affirmative injury determination.").

The Commission collected price information for six SRAM

products, designating them products 1 through 6. The Commission
Court No. 98-05-01460 Page 23

majority noted that domestic prices for SRAM products 1 through 6

generally "increased substantially during 1994 and through the

third quarter of 1995[;] [p]rices then fell substantially beginning

in the last quarter of 1995 and throughout 1996, before leveling

off somewhat in 1997." Second Remand Determination at 4. The

record evidence reasonably reflects these domestic price trends.

See Staff Report, Tables V-1 to V-6, at V-6 to V-16. The

Commission concluded, however, that subject imports did not

contribute significantly to the price trends. See Second Remand

Determination at 4.

In so finding, the Commission emphasized what it characterized

as the "strong evidence of a lack of correlation and causative

effect between the subject imports and domestic prices." Id. at 5.

The Commission stated,

With respect to products 3 and 5, which made up a greater
share of the subject imports and of the domestic product
than the rest of the identified products, the subject
imports consistently undersold the domestic product by
substantial margins during the time that domestic prices
rose, yet mostly oversold the domestic product in 1996
and 1997 when prices fell.

Id.; see also Final Determination at 41-42 (Comm’r Miller,

dissenting views). Substantial record evidence supports these
Court No. 98-05-01460 Page 24

conclusions.13 See Staff Report at IV-7, Table IV-3, and at V-6 to

V-16, Tables V-1 to V-6.

Micron notes that in Taiwan II the Court held that substantial

evidence supported the conclusion that Taiwanese products 3 and 5

had price depressing effects. See Micron Cmts. at 21 (citing

Taiwan II, 24 CIT at , slip op. 00-37 at 32-34). Nevertheless,

the possibility of drawing two inconsistent conclusions does not

prevent the Commission’s findings in its second remand

determination from being supported by substantial evidence. See

Consolo, 383 U.S. at 620. Based on the evidence indicating mixed

patterns of overselling and underselling by Taiwanese products 3

and 5 during the period in which domestic prices were consistently

declining, the Commission’s conclusion that Taiwanese products 3

and 5 did not significantly affect domestic prices is reasonable.

The Commission majority next addressed products 1 and 2.

13
Combined, Taiwanese products 3 and 5 accounted for over
50% of the Taiwanese SRAM imports in 1996 and over 67% in 1997.
See Staff Report at IV-7, Table IV-3, at IV-9, at V-9 to V-10,
Table V-3, and at V-13 to V-14, Table V-5. Meanwhile, products 3
and 5 accounted for just less than 40% of U.S. shipments in 1996
and over 60% of U.S. shipments in 1997. See id.
Taiwanese product 3 oversold the domestic product 3 in seven
months of 1996 and in ten months of 1997. See id. at V-10, Table
V-3. Taiwanese product 5 oversold the domestic product 5 in
seven months of 1996 and in eight months of 1997. See id. at V-
14, Table V-5.
Court No. 98-05-01460 Page 25

First, the Commission noted that these products "accounted for a

small share of shipments of domestic and subject import products .

. . ." Second Remand Determination at 5. The Commission also

pointed out that products 1 and 2 "were relatively new products

during the period of investigation, with significant volumes

beginning in the fourth quarter of 1995 for product 1 and the first

quarter of 1997 for product 2." Id. Substantial evidence supports

these conclusions.14 See Staff Report at IV-7, Table IV-3, and at

V-6 to V-8, Tables V-1 and V-2. Moreover, the record indicates

that "SRAMs begin their life cycle as a value-added product but are

quickly transformed into a commodity product . . . [;] [a]s a

result, SRAM prices historically show a pattern of steep price

declines as the products move along market and production life

cycles." Staff Report at I-20.

Based on this information, the Commission concluded that the

subject imports did not have significant price depressing effects

on domestic products 1 and 2. Regarding product 1, the Commission

first noted that, from January 1996 through January 1997, the

14
Combined, Taiwanese products 1 and 2 accounted for
slightly over 20% of Taiwanese imports in 1996 and roughly 25% of
Taiwanese imports in 1997. See Staff Report at IV-7, Table IV-3,
and at V-6 to V-8, Tables V-1 and V-2. Meanwhile, products 1 and
2 accounted for less than 5% of U.S. shipments in 1996 and less
than 10% of U.S. shipments in 1997. See id.
Court No. 98-05-01460 Page 26

"price of domestic product 1 fell at roughly the same rate as

prices of domestic products 3 and 5." Second Remand Determination

at 5-6. The record supports this finding. See Staff Report at V-

7, Table V-1, at V-10, Table V-3, and at V-14, Table V-5. Yet, the

Commission claimed, because product 1 was a newer product, "prices

for product 1 would be expected to fall more rapidly in 1996 than

prices for products 3 and 5." Second Remand Determination at 6.

That the "prices for domestic product 1 fell less than would be

expected based on the price trends for [domestic] products 3 and

5[,]" the Commission reasoned, suggested that the subject imports

did not significantly affect domestic prices for product 1. Id.

The Commission’s conclusions regarding product 1 are

reasonable. The record indicates that the most dramatic domestic

price declines for all products generally occurred in 1996. See

Staff Report at V-6 to V-16, Tables V-1 to V-6. Based on the

evidence that domestic prices for products 1, 3, and 5 fell at

approximately the same rate during this year even though Taiwanese

products 3 and 5 were both overselling and underselling while

Taiwanese product 1 was consistently underselling, the Commission

majority reasonably concluded that there was a lack of correlation

between the pricing of the subject imports and domestic prices for

product 1.
Court No. 98-05-01460 Page 27

Regarding product 2, the Commission stated, "[P]rices of

domestic product 2 fluctuated upward from January through June of

1997, the only year for which we have comparable data, despite

[very high margins of underselling by the Taiwanese imports in

product 2]." Second Remand Determination at 6. Substantial record

evidence supports this finding. See Staff Report at V-8, Table V-

2. From this evidence the Commission concluded, "Thus, the limited

data for product 2 also demonstrate[d] an absence of a significant

price depressing or suppressing effect by subject imports." Second

Remand Determination at 6. The record reasonably supports the

Commission’s conclusion.

Micron challenges the Commission majority’s conclusions as to

products 1 and 2, pointing to the Court’s holding in Taiwan II that

substantial evidence supported the conclusions that the significant

underselling of newer Taiwanese products 1 and 2 had price

depressing effects. See Micron Cmts. at 22. Again, however, the

possibility of drawing two inconsistent conclusions does not

prevent the Commission’s finding from being supported by

substantial evidence. See Consolo, 383 U.S. at 620. The record as

a whole reasonably supports the Commission majority’s conclusion

that the subject imports did not have significant price depressing

or suppressing effects on domestic products 1 and 2.
Court No. 98-05-01460 Page 28

Based on the evidence of a lack of correlation between the

prices of the subject imports and the domestic products, the

Commission majority reasonably concluded that the domestic price

declines were not "attributable in significant part to the subject

imports."15 Second Remand Determination at 6. In addition, the

Commission concluded that the domestic price trends, "including

price increases in 1994 and much of 1995, and price declines

starting in the fourth quarter of 1995, [were] attributable to

market forces other than the subject imports." Id.

First, the Commission majority noted the undersupply and

oversupply conditions that resulted, in part, due to an inaccurate

demand forecast. See Second Remand Determination at 6-7; Final

Determination at 41 (Comm’r Miller, dissenting views). Substantial

15
Regarding products 4 and 6, the Commission majority stated
that the price data collected on these products "[were] not
useful in [its] analysis because of the very small quantities
sold." Second Remand Determination at 6 n.19; see also Final
Determination at 42 n.16 (Comm’r Miller, dissenting views).
"[I]t is within the Commission’s discretion to make reasonable
interpretations of the evidence and to determine the overall
significance of any particular factor or piece of evidence."
Maine Potato Council v. United States, 9 CIT 293, 300, 613 F.
Supp. 1237, 1244 (1985). The record supports the Commission’s
conclusion that the quantities of products 4 and 6 were
relatively small. See Staff Report at IV-7, Table IV-3, at V-11
to V-12, Table V-4, and at V-15 to V-16, Table V-6. Therefore,
the Commission reasonably discounted the data regarding products
4 and 6 in its analysis.
Court No. 98-05-01460 Page 29

record evidence supports the Commission’s finding that the

undersupply condition and the following oversupply condition

significantly contributed to the domestic price increases in 1995

and subsequent price declines in 1996. See Staff Report at V-3.

The Commission majority also cited the "learning curve" effect

as a factor in the domestic price declines, while noting that "the

decline was temporarily interrupted by the inaccurate forecast of

demand growth in 1995 . . . ." See Second Remand Determination at

7. The learning curve is a phenomenon by which a firm’s

manufacturing costs, and hence its prices, decrease as it becomes

more efficient in production. See Final Determination at 22.

Substantial record evidence supports the Commission’s conclusion

that the learning curve played a role in the domestic price

declines. See Staff Report at I-20 and V-1.16

Based on the evidence indicating a lack of correlation between

the Taiwanese imports and domestic prices, as well as the evidence

16
As Micron points out, see Micron Cmts. at 25, in Taiwan II
we held that the first remand determination "adequately explained
how [the Commission] ensured that it did not attribute the price
depressing effects of the learning curve to the Taiwanese
imports." 24 CIT at , slip op. 00-37 at 36. Nevertheless,
the record also reasonably leads to the conclusion that the
learning curve contributed to the domestic price declines.
Court No. 98-05-01460 Page 30

that other market factors caused the domestic price declines,17 the

Commission majority reasonably concluded that the subject imports

did not significantly depress or suppress domestic prices.

3. Impact

The statute directs the Commission to examine the consequent

impact of the subject imports on the domestic industry. See 19

U.S.C. § 1677(7)(C)(iii). The Commission must consider "all

relevant economic factors which have a bearing on the state of the

industry in the United States, including but not limited to" those

enumerated. Id.; see also supra at n.9. In its second remand

determination, the Commission majority adopted Commissioner

Miller’s views regarding the impact of the subject imports on the

domestic industry. See Second Remand Determination at 8.

In her dissenting views to the original determination,

Commissioner Miller analyzed each of the factors enumerated in §

1677(7)(C)(iii) and found that the domestic industry’s financial

performance had worsened in the latter years of the POI. See Final

Determination at 43-45 (Comm’r Miller, dissenting views).

17
In addition, the Commission noted the competition in
products 1, 2, 3, and 5 from non-subject imports, although the
Commission appears to ascribe less weight to this factor than to
the demand misforecast and the learning curve effect. See Second
Remand Determination at 7 n.21.
Court No. 98-05-01460 Page 31

Nevertheless, Miller concluded that the subject imports did not

cause the deterioration. See id. at 45.

Consistent with Miller’s analysis, the Commission majority

concluded that the domestic industry suffered a "declining

financial performance primarily [as] a result of price declines .

. . ." Second Remand Determination at 8. Because the subject

imports did not have significant price depressing effects, however,

the Commission concluded that the subject imports did not make a

material contribution to the domestic industry’s injury. See id.

The Commission majority’s determination is reasonable. In

Taiwan II, we noted that the record reasonably supported the

conclusion that the domestic industry was suffering material injury

as a result of its weakened financial condition in 1996 and 1997.

See 24 CIT at , slip op. 00-37 at 50-51. In addition, based on

the evidence of the domestic price declines beginning in the last

quarter of 1995 and continuing through 1996, see Staff Report at V-

6 to V-16, Tables V-1 to V-6, the Commission reasonably concluded

that price declines were a primary cause of the domestic industry’s

poor financial condition. Finally, because substantial evidence

supports the conclusion that the subject imports did not have

significant price depressing effects, the Commission reasonably

concluded that the subject imports did not make a material
Court No. 98-05-01460 Page 32

contribution to the domestic industry’s injury.

In addition, the Commission majority discussed the evidence

of lost revenue allegations. See Second Remand Determination at 8.

In the first remand determination, Commissioner Bragg concluded

that the "relationship between [the confirmed revenue losses for

product 5] and industry operating income [losses] . . . provide[d]

perhaps the most direct possible evidence of the significant

effects of subject imports." First Remand Determination at 19

(citing Staff Report at V-24 to V-28, Table V-8, and at VI-7, Table

VI-3). In Taiwan II, however, we held that, absent an explanation

of how it was reasonable to rely on four of the confirmed lost

revenue allegations (the "4Q95-1Q97" allegations), the Court could

not sustain as supported by substantial evidence the conclusion

that the instances of lost revenues for product 5 had a significant

impact on the domestic industry’s operating income. See 24 CIT at

, slip op. 00-37 at 53.

"The Commission calculates lost revenues from the equation:

(producer’s initial U.S. price quote - U.S. price quote accepted by

buyer) X (quantity sold)." Id. at , slip op. 00-37 at 52. The

four 4Q95-1Q97 allegations bore a quote date encompassing the

fourth quarter of 1995 through the first quarter of 1997.

Considering the steady decline in domestic prices from late 1995
Court No. 98-05-01460 Page 33

through 1997, the Court reasoned that the use of such a long quote

date potentially inflated the measurement of revenue lost due to

competition from the subject imports. See id. (citing Staff Report

at V-13 to V-14, Table V, and at V-27, Table V-8). Combined, the

4Q95-1Q97 allegations accounted for approximately 94% of all

confirmed lost revenue allegations for product 5. See Staff Report

at V-24 to V-28, Table V-8.

On second remand, the Commission reopened the record to gather

additional information on the 1Q95-4Q97 lost revenue allegations.

The Commission learned that the purchaser’s records regarding these

allegations had been destroyed. See May 25, 2000 Mem. INV-X-115,

Lynn Featherstone to the Commission (List 2, Doc. 409) at 2. The

Commission, however, did speak with the employee who had confirmed

the original lost revenue allegations. The employee indicated that

prices were typically negotiated on a quarterly basis and that the

differential in price quotes in the allegations stayed about the

same from the fourth quarter of 1995 through the first quarter of

1997. See id. In addition, the employee "indicated that his firm

probably did use import quotes to get prices reduced in order to

maximize profitability." Id. at 3.

In its second remand determination, the Commission majority

concluded that "the lost revenue allegations in this investigation
Court No. 98-05-01460 Page 34

[did] not constitute sufficient evidence to indicate that the

subject imports had a significant impact on the domestic industry."

Second Remand Determination at 8. The Commission noted that, by

quantity and value, the 4Q95-1Q97 allegations constituted "the

great bulk" of the lost revenues. See id. Yet, since prices were

negotiated on a quarterly basis, the Commission could not precisely

quantify the amount of revenue implicated by these allegations

without the rejected and accepted price quotes for each quarter of

the time period covered in the allegation (the fourth quarter of

1995 through the first quarter of 1997). See id. at 8 n.23.

Consequently, although the Commission found that the domestic

revenues lost due to the 4Q95-1Q97 allegations "[did] not appear

insubstantial[,]" it nevertheless concluded that, "in the absence

of significant price depressing or suppressing effects by the

subject imports, . . . the lost revenue allegations alone were

insufficient to demonstrate that the subject imports themselves had

a significant impact on the domestic industry." Id. at 8.

The Commission’s conclusions are reasonable. "[I]t is within

the Commission’s discretion to make reasonable interpretations of

the evidence and to determine the overall significance of any

particular factor or piece of evidence." Maine Potato, 9 CIT at

300, 613 F. Supp. at 1244. Given that the purchaser’s records
Court No. 98-05-01460 Page 35

regarding the 4Q95-1Q97 allegations had been destroyed, it was

reasonable for the Commission to accord less weight to their value.

Moreover, the evidence indicating that Taiwanese product 5

generally oversold the domestic product in 1996 and 1997 directly

undermines the conclusion that U.S. producers suffered heavy

revenue losses in product 5 due to price competition from Taiwanese

imports. See Staff Report at V-14, Table V-5. Taken together with

the substantial evidence that the subject imports did not have

significant price depressing or suppressing effects, the Commission

reasonably concluded that lost revenue allegations alone were

insufficient to demonstrate that the subject imports themselves had

a material negative impact on the domestic industry.

4. Conclusion

Substantial evidence supports the Commission majority’s

conclusion that the subject imports did not make a material

contribution to the domestic industry’s injury. Therefore, the

Court sustains the Commission’s negative material injury

determination.

B. Threat of Material Injury

Pursuant to 19 U.S.C. § 1673d(b)(1)(A), the Commission

majority also addressed whether the domestic SRAM industry is
Court No. 98-05-01460 Page 36

threatened with material injury.18 In examining the causal

18
As Defendant points out, Micron did not challenge the
Commission’s threat analysis in Micron’s initial comments. See
Micron Cmts. Therefore, Defendant did not address the threat
analysis in its rebuttal brief. See Def.’s Rebuttal to Micron
Cmts. at 1 n.1 ("Micron did not submit comments on the
Commission’s discussion on remand of the threat of material
injury, and thus should be regarded as being in agreement with
it."). In its subsequent rebuttal to Plaintiffs’ comments,
however, Micron did challenge the Commission’s threat analysis in
the second remand determination. See Micron Cmts. in Resp. to
Pls.’ Cmts at 14-15. In response, Defendant asserts that Micron
improperly raised the threat issue for the first time in its
rebuttal to Plaintiffs’ comments, denying the Commission an
opportunity to respond.
The Court determines that it is appropriate to review the
Commission’s threat analysis on second remand. First, despite
the fact that Micron has not challenged the Commission’s threat
determination at the administrative level, we do not find that
the rule of exhaustion of remedies precludes the Court from
reviewing the issue. The rule of exhaustion of administrative
remedies is neither absolute nor inflexible. See 28 U.S.C. §
2637(d)(1994)(the court "shall, where appropriate, require the
exhaustion of administrative remedies")(emphasis added); see also
United States v. Priority Products, Inc., 793 F.2d 296, 300 (Fed.
Cir. 1986)("Congress appears to have . . . grant[ed] the Court of
International Trade some discretion to excuse the failure to
exhaust administrative remedies."). Here, it is appropriate for
the Court to review the Commission’s threat determination because
the Commission clearly considered the issue. See Second Remand
Determination at 9. Moreover, in conducting its second remand,
the Commission only invited comments from parties concerning the
new information gathered regarding the lost revenue allegations.
See Static Random Access Memory Semiconductors From Taiwan, 65
Fed. Reg. 31,928 (Commission, May 19, 2000)(notice and scheduling
of remand proceedings). In addition, although Micron should have
raised the threat issue in its initial comments to the Court, the
Commission is not prejudiced by not having the opportunity to
respond to Micron’s rebuttal comments, because the Court affirms
the Commission’s negative threat determination. See discussion
infra pp. 38-44.
Court No. 98-05-01460 Page 37

connection between the LTFV imports and the threatened material

injury, the statute requires the Commission to consider, "among

other relevant economic factors," nine enumerated factors. Seven

factors are relevant to consider in this case:19

(II) any existing unused production capacity or imminent,
substantial increase in production capacity in the
exporting country indicating the likelihood of
substantially increased imports of the subject
merchandise into the United States, taking into account
the availability of other export markets to absorb any
additional exports,

(III) a significant rate of increase of the volume or
market penetration of imports of the subject merchandise
indicating the likelihood of substantially increased
imports,

(IV) whether imports of the subject merchandise are
entering at prices that are likely to have a significant
depressing or suppressing effect on domestic prices, and
are likely to increase demand for further imports,

(V) inventories of the subject merchandise,

(VI) the potential for product-shifting if production
facilities in the foreign country, which can be used to
produce the subject merchandise, are currently being used
to produce other products,

. . . .

(VIII) the actual and potential negative effects on the
existing development and production efforts of the
domestic industry, including efforts to develop a
derivative or more advanced version of the domestic like

19
Neither a countervailable subsidy (factor I) nor a raw
agricultural product (factor VII) is involved in this case.
Court No. 98-05-01460 Page 38

product, and

(IX) any other demonstrable adverse trends that indicate
the probability that there is likely to be material
injury by reason of imports (or sale for importation) of
the subject merchandise (whether or not it is actually
being imported at the time).

19 U.S.C. § 1677(7)(F)(i).20

The Commission evaluates these factors by applying the

standards set forth in § 1677(7)(F)(ii). The Commission is to

"consider the factors set forth [above] as a whole in making a

determination of whether further dumped . . . imports are imminent

and whether material injury by reason of imports would occur unless

an order is issued . . . ." Id. Moreover, the "determination may

not be made on the basis of mere conjecture or supposition." Id.

In sum, "the Commission must determine whether the LTFV imports

themselves made a material contribution to the threatened material

injury." NEC Corp. v. Dep’t of Commerce, 22 CIT , , 36 F.

Supp. 2d 380, 392 (1998).

In its second remand determination, the Commission determined

that the U.S. SRAM industry is not threatened with material injury

by reason of the Taiwanese imports. See Second Remand

20
"The presence or absence of any factor which the
Commission is required to consider under [§ 1677(7)(F)(i)] shall
not necessarily give decisive guidance with respect to the
determination." 19 U.S.C. § 1677(7)(F)(ii).
Court No. 98-05-01460 Page 39

Determination at 9. In doing so, the Commission majority adopted

Commissioner Miller’s discussion of threat of material injury from

her dissenting views to the original determination. See id.; see

also Final Determination at 45-48 (Comm’r Miller, dissenting).

Below, the Court reviews Commissioner Miller’s analysis regarding

each of the relevant statutory factors.

Regarding factor II (production capacity), Commissioner Miller

concluded, "Despite the planned increases over the longer term, as

well as the relative ease with which production capacity can be

shifted between different types of semiconductors, I do not find

evidence that imminent and significant increases in SRAM exports to

the United States are likely." See Final Determination at 47

(Comm’r Miller, dissenting). The record reasonably supports this

conclusion. As Commissioner Miller pointed out, several foreign

producers reported to the Commission that new capacity would not be

dedicated to SRAM production. See Staff Report at VII-9 to VII-11.

Moreover, for the first year following the POI, 1998, foreign

producers projected declines in both capacity and production of

SRAMs. See id. at VII-13, Table VII-2. Given that the Taiwanese

industry’s capacity for cased SRAMs21 was lower in 1997 than in

21
Over the POI, the Taiwanese industry exported
significantly more cased (or assembled) SRAMs to the United
Court No. 98-05-01460 Page 40

either 1995 or 1996, it was reasonable for the Commission to rely

on the industry’s projections. See id. Therefore, Commissioner

Miller reasonably concluded based on the record that production

capacity in Taiwan did not indicate a likelihood of increased

subject imports to the United States.

Regarding factor III (volume and market penetration),

Commissioner Miller concluded, "I do not find that the volume and

market penetration of the subject imports indicates a likelihood of

substantially increased imports." Final Determination at 47

(Comm’r Miller, dissenting). Substantial record evidence supports

this conclusion. First, while the absolute volume of total

Taiwanese SRAM exports to the United States increased over the POI,

the number was projected to decrease in 1998. See Staff Report at

VII-13, Table VII-2. Moreover, as a share of total Taiwanese

shipments, SRAM exports to the United States remained relatively

steady over the POI. See id. at VII-14, Table VII-2. Therefore,

Commissioner Miller reasonably concluded that the record did not

indicate a likelihood of substantially increased subject imports to

the United States.

States than the two other SRAM types investigated, uncased (or
unassembled) SRAMs and SRAM memory modules. See Staff Report at
VII-3, Table VII-2.
Court No. 98-05-01460 Page 41

Regarding factor IV (price effects), Commissioner Miller

concluded, "I find nothing in the record to suggest that [the

subject] imports are likely to have significant price effects in

the future, especially in light of the widespread availability of

non-subject imports." Final Determination at 47 (Comm’r Miller,

dissenting). As discussed above, substantial evidence supports the

conclusion that the subject imports did not have significant price

effects during the POI. Moreover, the great weight of the record

indicates that non-subject imports were competitive with U.S. SRAMs

and maintained a much higher share of the U.S. market throughout

the POI. See Staff Report at I-10, Table I-1, at I-11, at I-13,

Table I-2, at II-3 to II-4, at II-9, at II-12, at II-13, at II-15,

at IV-7, Table IV-3, and at IV-9, Table IV-4. Therefore,

Commissioner Miller reasonably concluded that the subject imports

were not likely to have significant price effects in the future.

Regarding factor V (inventories of the subject merchandise),

Commissioner Miller concluded the "inventories of the subject

imports also indicate[d] that substantially increased SRAM imports

[were] unlikely." Final Determination at 47 (Comm’r Miller,

dissenting). As Commissioner Miller pointed out, inventories of

Taiwanese SRAMs held by U.S. importers increased in absolute

quantity over the POI, but declined as a share of total U.S.
Court No. 98-05-01460 Page 42

imports in the latter part of the POI. See Staff Report at VII-15,

Table VII-6. Moreover, inventories of SRAMs held in Taiwan

decreased in 1997 in both absolute terms and relative to total

Taiwanese shipments. See id. at VII-13 to VII-14, Table VII-2.

Therefore, the record reasonably supports Commissioner Miller’s

conclusion that the inventories of the subject imports did not

indicate that substantially increased imports were likely.

Regarding factor VI (potential for product shifting),

Commissioner Miller concluded that producers of SRAMs in Taiwan are

able to shift production from other memory integrated circuit

products to SRAMs. See Final Determination at 46 (Comm’r Miller,

dissenting)(citing Staff Report at VII-7). Because several

Taiwanese producers projected a decline in both capacity and

product of SRAMs, however, Commissioner Miller did not emphasize

this factor. See Staff Report at VII-9 to VII-11, and at VII-13,

Table VII-2. The Commission has discretion to weigh the

significance of each factor in light of the circumstances. See

Iwatsu Elec., 15 CIT at 49, 758 F. Supp. at 1510-11. Under the

circumstances of this case, it was reasonable for Commissioner

Miller not to ascribe substantial weight to the ability of

Taiwanese SRAM manufacturers to product-shift.

Regarding factor VIII (domestic development and production),
Court No. 98-05-01460 Page 43

Commissioner Miller concluded, "I do not find that the subject

imports from Taiwan have had an actual or potential negative effect

on the development and production efforts of the domestic

industry." Final Determination at 48 (Comm’r Miller, dissenting).

The record indicates that, although domestic capital expenditures

declined in 1996 and 1997, expenditures had doubled in 1995; thus,

the 1997 level was still greater than the amount spent in 1994, the

first year of the POI. See Staff Report at VI-11, Table VI-4.

Meanwhile, although research and development expenses had decreased

in 1997, the 1997 level was still almost double the 1994 level.

See id. Based on this record evidence, Commissioner Miller

reasonably determined that the subject imports did not have

significant actual or potential negative effects on development and

production of SRAMs in the United States.

Finally, Commissioner Miller found "no indication of any

‘other demonstrable adverse trends’ that indicate[d] that there

[was] likely to be material injury by reason of the subject

imports." Final Determination at 48 (Comm’r Miller,

dissenting)(applying 19 U.S.C. § 1677(7)(F)(i)(IX)). Upon review

of the record as a whole, this conclusion appears reasonable.

In its rebuttal brief, Micron argues that the record evidence

indicates that the domestic industry is threatened with material
Court No. 98-05-01460 Page 44

injury by reason of the subject imports. See Micron’s Cmts. in

Resp. to Pls.’ Cmts. at 14-15. That Micron "can hypothesize a

reasonable basis for a contrary determination[, however,] is

neither surprising nor persuasive." Matsushita Elec. Indus. Co. v.

United States, 750 F.2d 927, 936 (1984). The Court concludes that,

based on a consideration of the record evidence and the §

1677(7)(F)(i) factors as a whole, the Commission majority

reasonably determined that the U.S. SRAM industry is not threatened

with material injury by reason of the subject imports.

Conclusion

The Commission’s negative material injury and negative threat

of material injury determinations are supported by substantial

evidence and are otherwise in accordance with law. Therefore, the

Commission’s second remand determination is affirmed. Judgment

will be entered accordingly.

Donald C. Pogue
Judge

Dated: August 29, 2000
New York, New York