A bill to direct the Secretary of Commerce to impose countervailing duties on dynamic random access memory (DRAM) semiconductors produced by Hynix Semiconductor.

Mr. President, I rise today to visit with my colleagues about something that is going on in Idaho and across this Nation at this moment that is critical to our economy, and especially critical to the economy of the State of Idaho. The situation that a company in Idaho finds itself in at this moment has resulted in its need to lay off 10 percent of its workforce because of actions taken by the Korean Government to prop up a bankrupt competitor of Micron.

Micron is a company in Idaho that has been in place and is the world's second largest producer of memory chips. As a result of the Korean Government's propping up of the Hynix Semiconductor Corporation, the market now is tremendously softened and layoffs are occurring.

In the mid-1980s, Micron almost went out of business because of dumping by Japanese companies. At that time, I acted in concert with the Bush Government. President Bush at that time worked with the Department of Commerce to put duties on that offset, but eventually that overrode that impact and it allowed that company, Micron, to become the second larger of the semiconductor companies in the world today.

Micron, as I mentioned, is critical to the technological base of the United States. It employs 13,000 people--invaluable high-tech jobs in the U.S. and in other parts of the world. It produces D-RAM semiconductors, or random memory chips, a key component in countless electronic systems, from personal computers to satellites to military command and control systems.

Most importantly, Micron is the only remaining producer of D-RAM chips in the United States. There used to be a half dozen of these companies a decade ago, but they all left the business in large part due to the unfair trade practices of other countries such as and including Korea.

Now I believe I must do what I can to address this new situation that is costing U.S. jobs in the United States, is weakening our technology base, and is having a substantial impact on the State of Idaho.

My bill, introduced last week, S. 492, reflects just how far, in my opinion, the Government of Korea has pushed with what I call illegal subsidies, and it reflects just how far I think we must go to respond to that situation.

My bill would impose a duty on Hynix semiconductors as they come into the country. My bill ``suspends liquidation'' for these Korean semiconductors, which is another way of saying it watches them at the border. Then my bill requires a cash deposit of estimated countervailing duties in the 80-percent range. That is a serious step. Yet it is a legal and an appropriate step and, yes, it is actionable under the WTO, but it focuses us as a country on the problem we are facing with this kind of competition that I believe is illegal and is heavily Government supported.

I am angry, and I say that straightforwardly, at the Government of Korea and their continued unrelenting campaign of illegal subsidies to Hynix in an attempt to bring our domestic producer not only to its knees, but to destroy it altogether and then dominate the semiconductor industry.

Since October of 2000, the Korean Government, acting through the banks it owns and controls, has provided an incredible $16 billion--let me repeat that--the banks of Korea have provided an incredible $16 billion in subsidies to Hynix, the Korean producer of D-RAM semiconductors. How much has our Federal Government subsidized Micron? Nada; not one bit.

I think it is time we at least put up a barrier and test the international trade community to understand whether this is or is not an illegal action. We have that argument before the ITC at this moment. We hope there is a finding soon. But until then, I hope this Senate and the Finance Committee can come on point to recognize the critical environment that is being created by a company such as Hynix and a government backing them that strictly supports them for the purpose of dominating a world market and keeping its people employed.

In the 1990s, Government-controlled banks in Korea lent heavily to Hynix at cheap rates, and Hynix built up massive capacity, over 90 percent of which it exports. Ninety percent of what it produces in Korea leaves for the world market.

The Government of Korea built up this company with one goal in mind: to create an export powerhouse. It succeeded, and Hynix became the No. 3 producer of D-RAM chips in the world.

When Hynix became unable to repay the debt coming due in 2001, the Government of Korea stepped in and essentially wiped out the debt by providing over $16 billion in debt forgiveness and debt restructuring over the past 2\1/2\ years. There is no rational economic justification for Government support for Hynix. Hynix has been unable to repay its debt, and it has lost $8 billion over the past 3 years. The subsidies it has received have permitted Hynix to stay in business and continue to run all its D-RAM plants at full capacity, flooding the market with subsidized product.

They cannot make money. They have lost money, $8 billion over the last 3 years; and yet the Government still dumps money into them, and they are dumping money into them at a time when they are out building new capacity. The most recent Hynix bailout came 2 months ago when the Government provided $4.1 billion in debt relief and another $4.1 billion in subsidy. Hynix only had $2.4 billion in sales last year. It just does not add up. Take a chalkboard out and outline that for the world to see, and the world will say that is a Government-controlled, Government-subsidized plant that is not even making a profit and, in fact, is losing large amounts of money.

Hynix will use the debt forgiveness to continue to expand capacity. Just last week--this is almost like a slap in the face to the American workforce and to Micron and its companies--just last week Hynix announced it would begin work on new fabrication lines to produce D- RAMs on state-of-the-art 300 mm wafers which will result in even more subsidized D-RAM from Hynix. They cannot make a profit, they are being subsidized heavily, and they are going to build more capacity. That does not make any sense at all, but then again putting a lot of people out of work in Idaho does not make any sense either when we are asking a company to compete against this producer at well below market prices.

Now we read in the papers that Hynix and other Hyundai companies are being investigated for illegally transferring $500 million to North Korea in 2000. If that is true, that is a real slap in the face of Americans and the American worker. Of course, they did that for lucrative contracts. It did so with the help of South Korean banks and with the approval of the President of South Korea. I say that again. North Korea is being investigated for illegal actions with that country. This is the country that plans to reactivate its nuclear arms program and, we are now told, has just started one of its reactors. I hope the world will not tolerate this situation, and I hope our Senate will speak up to the issue.

Korea is a developed country. It is one of the most developed economies in Asia. The Korean Government has absolutely no business keeping a company going when it would otherwise be bankrupt, and there is no question about it. Like I said, pull a chalkboard out, and run those figures. You have one conclusion: Unless your banker or your best friend--and in this instance, the bank is the best friend. The Government owns the bank and the bank owns the company and you bail them out for $16 billion. The purpose is obvious.

The purpose of my legislation is to urge the Department of Commerce and other U.S. trade agencies to do everything in their power to fix this problem. That is what our trade laws are for. Do I like doing what I am doing? Absolutely not. Will I apologize for trying to protect an American company and a workforce against a heavily subsidized dominating company that wants to control the world marketplace with an undercost product? No, I will not apologize for that whatsoever.

Is the action I take if the Senate were to pass my bill and were it to become law actionable at the WTO? Absolutely, and it ought to be to test whether what we have done is appropriate or whether, in fact, what Korea is doing at this moment is illegal, as I believe it is, and as I think the world marketplace would believe and the World Trade Organization.

Once again, the ITC is reviewing this. We hope by late March that decision will be out there. The European Union is already reviewing Hynix. I am told they are finding them in violation. Why should American workers, Idaho workers, a great American company, one of the great American success stories, have to shut itself down and put itself in financial stress because it is being dumped on in a world market?

Those are the problems we face. That is why I have introduced the legislation. My colleague, Senator Crapo, has introduced a resolution and has spoken to it. On the House side, Congressman Butch Otter speaks to it. Clearly, Idaho and Idaho's economy will take a tremendous hit because the Koreans are illegally playing the world trade game, heavily subsidized by their banks and by their government.

I yield the floor.

I thank my colleague.

Mr. President, I ask unanimous consent that I be given 1 minute. I do have the approval of the distinguished Senator from New Mexico.

Mr. President, I compliment my colleague from Idaho. He has called it exactly the way it is. What is going on is a matter of unfair competition. It is a matter of improper governmental subsidization in competition with a company that is doing it all without government subsidization. I personally thank him for his good remarks; I agree with them and I would like to be associated with them.