Trade panel’s ruling on plates to affect LCDs

Manufacturers of semiconductors and liquid-crystal displays are hoping that today the Korea Trade Commission will reverse its preliminary ruling that Japanese companies illegally dumped a key industry component. In October, the trade commission imposed anti-dumping duties of up to 40 percent on Japanese polyvinyl chloride, or PVC, plates to protect domestic industry. In April 2004, Crown Inc., a local manufacturer with the exclusive rights to produce PVC plates in Korea, asked for an investigation into whether Japanese PVC plate makers were selling them in Korea at an illegal discount. “We put a lot of resources into developing PVC plates six years ago, and if Japanese dumping persists, we are going to fall, and so will the domestic materials industry,” said Shin Hyeon-jung, a Crown executive. However, the ruling has created concerns that Korea is protecting domestic industries at the cost of free trade, said Hwang Inhak, an official of Korea Economic Research Institute. The plates make up a 7.8 billion won ($7.6 million) market in Korea, which isn’t huge, but price changes can have a big effect on semiconductor and LCD industries, which use these plates as key components. Korean companies that use Japanese plates to produce semiconductors complained about the high anti-dumping duties, which increased production costs. Kim Seok-gyu, an official of HANIL Hightech Co., defended the use of the cheaper Japanese plates. “Japanese products are cheaper because their production methods are much more efficient,” he said. In its ruling last year, the Korea Trade Commission impose tariffs on three-meter PVC plates, which are used to produce seventh-generation liquid crystal displays, and nonflammable PVC plates, even though neither is produced by Crown, prompting some companies to ask that the court exclude these components from its ruling. Crown said three-meter PVC plates can be cut into 2.4-meter pieces and welded together to produce seventh-generation LCDs. However LCD equipment makers say LCD manufacturers are reluctant to use this method because welding may increase the chance of an explosion. by Kim Young-ook, Koo Won-mo