The Korean Semiconductor Industry Association (KSIA) has hit back at allegations by Siemens's chief executive that "suicidal pricing" was responsible for the recent closure of the German company's Tyneside, UK factory.
In a letter in today's 'Financial Times', Hye-Bum Choi, director of the KSIA, said that Korean semiconductor producers rejected "as totally ridiculous" the allegation that they had been dumping memory chips.
On 2 August, Heinrich von Pierer, CEO of Siemens, blamed suicidal pricing by Korean manufacturers, and the investments some receive from the International Monetary Fund, as part of the reason for his decision to close the plant.
Hye-Bum, in his letter, said that Siemens could not ignore "an unequivocal and specific promise" the Korean government had made that IMF funds will be used to repay foreign debts and increase foreign currency reserves - not to subsidise prices.
Further, he said that Siemens was unfairly blaming the Korean big three for a general downcycle. "There is no reason to single out Korean producers for a worldwide phenomenon which concerns all producers," he said. "The Korean producers have taken drastic steps to reduce the overcapacity in the memory market by suspending investment plans."
The day Siemens announced the closure, Peter Mandelson, the new head of the UK Department of Trade and Industry, contributed to the row by blaming Korean overproduction. But that conflicted with a promise by Derek Fatchett, from the Commonwealth & Foreign Office, of more investment for Korea.
However, industry sources say that the European Union is continuing to take the allegations of dumping seriously. According to those sources, the EU will launch an investigation in September.
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