CLA-2-OT:RR:CTF:TCM H013678 IOR
Tariff No.: 8543.89.9695, 9802.00.80
Area Port Director
Customs and Border Protection
605 W. 4th Ave., Ste. 230
Anchorage, AK 99501
Attn: Helene Mikes, SIS
Re: Protest AFR No. 3195-07-100098; assembled multi-die products
Dear Port Director:
This is our decision on the application for further review (AFR) of protest no. 3195-07-100098, filed against your classification of assembled multi-die products, under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The twelve protested entries of assembled multi-die products were made from June 8 through August 25, 2005, by Kionix, Inc. (“Kionix”). The merchandise was entered under subheading 8542.29.00, HTSUS, as “other” electronic integrated circuits and microassemblies. The entries were liquidated under subheading 8543.89.96, HTSUS as “other” electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter, from September 1 though September 8, 2006. A timely protest was filed by Kionix February 27, 2007. The protestant asserts that the assembled multi-die products should have been classified under subheading 8542.60.00 HTSUS as hybrid integrated circuits. The protestant also asserts that the multi-die products qualified for partial duty exemption under subheading 9802.00.80, HTSUS. For some entries covered by this protest, no claim under subheading 9802.00.80, HTSUS, was made. However, your office notes that proper documentation was provided for all of the entries and does not dispute the claim for partial duty exemption under subheading 9802.00.80, HTSUS.
The protestant describes the assembled multi-die products as follows:
Each Kionix hybrid integrated circuit contains a silicon sensor chip that responds to acceleration (an accelerometer) or rotation (a gyroscope), in addition to a separate silicon integrated circuit chip (an ASIC). The integrated circuit converts signals from the sensor chip and translates them into usable electrical signals from the outside world. When imported back into the U.S., the two chips are contained in an overmolded plastic package and connected by miniature wires.
Kionix ships unpackaged fabricated sensor and circuit chips to Asia, where they are assembled on a single leadframe or single laminate, encapsulated with plastic, and shipped back for testing. The Kionix sensor, which is created by thin-film technology, and ASIC die are mounted on a single leadframe substrate or a single laminate substrate.
When the hybrid integrated circuits return from Asia to the U.S., they are uncalibrated and the motion response is not characterized, therefore they are not finished products and unusable by the customers. Kionix then performs a calibration on each part before directly shipping to a customer or intermediary.
The Kionix hybrid integrated circuit is always part of a larger engineering system, which performs a function based on the output of the chip. It is impossible to use the output of the Kionix chip to serve the function (i.e. navigation, disk drive protection, pedometer, gaming interface) without interpreting the signals coming from the sensor using a separate microprocessor or circuit board. The Kionix circuits are not entered with either of those articles.
….
The Kionix devices conform to the description of hybrid integrated circuits. They have an integrated circuit chip (an active element) and a sensor chip (which can be considered a passive chip, manufactured by thin film methods, but not having any active circuits). The Kionix sensor and ASIC die are mounted on a single leadframe substrate or a single laminate substrate. (Emphasis in original).
The components, sensor chip and integrated circuit, are combined to all intents and purposes, indivisibly. This means that although either in theory could be replaced or removed, it would be a complex, time-consuming and prohibitively expensive task. That is the case here, and any such removal would physically damage and destroy the value of Kionix’s hybrid integrated circuit. Kionix is willing to provide more information on this if necessary.
ISSUES:
Whether the assembled multi-die products are classified under heading 8542, HTSUS, as “electronic integrated circuits and microassemblies,” or heading 8543, HTSUS, as “electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter.”
Whether the multi-die products qualify for the partial duty exemption under subheading 9802.00.80, HTSUS, when imported into the United States.
LAW AND ANALYSIS:
I. Classification
Initially we note that the matter protested is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification, and the protest was timely filed, within 180 days of the liquidation of the entries.
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
The 2005 HTSUS subheadings under consideration are as follows:
8542 Electronic integrated circuits and microassemblies; parts thereof:
8542.60.00 Hybrid integrated circuits………………………
Electrical machines and apparatus, having individual functions,
not specified or included elsewhere in this chapter; parts thereof:
Other machines and apparatus:
Other:
Other:
Other:
Other……
Note 5(b)(ii) to Chapter 85, HTSUS, for purposes of heading 8542, HTSUS, defines hybrid integrated circuits (HICs) as follows:
Hybrid integrated circuits in which passive elements (resistors, capacitors, interconnections, etc.) obtained by thin- or thick-film technology and active elements (diodes, transistors, monolithic integrated circuits, etc.) obtained by semiconductor technology, are combined to all intents and purposes indivisibly, on a single insulating substrate (glass, ceramic, etc.). These circuits may also include discrete components;
Note 5 further provides that “[f]or the classification of articles defined in this note, headings 8541 and 8542 shall take precedence over any other heading in the tariff schedule which might cover them by reference to, in particular, their function.”
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes (ENs), although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The 2005 ENs 85.42, in (I) (2) describe HICs as follows:
These are microcircuits built up on an insulating substrate on which a thin or thick film circuit has been formed. This process allows certain passive elements (resistors, capacitors, interconnections, etc.) to be produced at the same time. However, to become a hybrid integrated circuit of this heading, semiconductors must be incorporated and mounted on the surface, either in the form of chips, whether or not encased, or as encased semiconductors (e.g., in specially designed miniature casings). Hybrid integrated circuits may also contain separately produced passive elements which are incorporated into the basic film circuit in the same way as the semiconductors. Usually these passive elements are components such as capacitors, resistors or inductors in the form of chips.
Substrates made up of several layers, generally ceramic, heat-bonded together to form a compact assembly, are to be taken to form a single substrate within the meaning of Note 5 (B) (b) to this Chapter.
The components forming a hybrid integrated circuit must be combined to all intents and purposes indivisibly, i.e., though some of the elements could theoretically be removed and replaced, this would be a long and delicate task which would be uneconomic under normal manufacturing conditions.
In support of its protest, Kionix cites to the CBP decisions in HQ 963150, dated March 29, 2002, and NY I82633, June 26, 2002, for the proposition that the instant merchandise is an HIC. In HQ 963150, we classified a combination of components described as “chip technology … laid on top of film technology” in heading 8542, HTSUS. In NY I82633, the “product was developed by creating a resistor, a passive element, directly on a glass insulating substrate using thin film technology to which an application specific integrated circuit (ASIC), an active element that was obtained through semiconductor technology, was mounted on the substrate.” In both of those cases, the product was manufactured by placing one chip onto the substrate upon which the first chip had been “built up on”. Moreover, in HQ 961050, dated May 1, 2000, CBP explained that “we interpret the Harmonized System’s definition of an HIC as formed by layering a thin or thick film circuit, in the mass (nondiscrete) on top of the substrate,” to which separately produced semiconductors must be incorporated. That is not the case here. In contrast, the Kionix silicon sensor chip was separately produced, and was not incorporated into the base film circuit, and together with the IC (ASIC) chip was mounted onto a lead-frame or laminate substrate. Therefore, the instant merchandise cannot be classified in heading 8542, HTSUS.
The EN 85.42, supports this conclusion. It defines HICs as “microcircuits built up on an insulating substrate on which a thin or thick film circuit has been formed … [h]owever to become a hybrid integrated circuit of this heading, semiconductors must be incorporated and mounted on the surface.” The semiconductor must be mounted on the same surface as the one upon which the other chip was built.
Therefore, we find that the assembled multi-die products are not HICs within the meaning of the HTSUS. The protestant argues that the elements are “combined to all intents and purposes indivisibly.” As we conclude that the assembled multi-die products are not manufactured in the same manner as HICs, we do not need to address the issue of whether they are “combined to all intents and purposes indivisibly.”
Kionix also argues that the principle of ejusdem generis is applicable. Specifically, Kionix asserts that “[i]f [CBP] believes that the term ‘hybrid integrated circuit’ does not apply to Kionix’s chips at issue, then it must apply ejusdem generis to determine if the chips are of the same class or kind as a hybrid integrated circuit or electronic integrated circuit.” We disagree. As cited by the protestant, the principle of ejusdem generis applies “where an enumeration of specific things is followed by a general word or phrase.” Totes, Incorporated v. United States, 69 F.3d 495, 498 (Fed. Cir.1995). In this case neither the heading text of 8542, HTSUS, nor Chapter 85 Note 5(b) to Chapter 85 contains an enumeration of specific things followed by a general word or phrase. Note 5(a) to Chapter 85 refers to “diodes, transistors and similar semiconductor devices” however the protestant does not argue that the subject assembled multi-die products are semiconductor devices similar to diodes and transistors.
The subject articles are classifiable under heading 8543, HTSUS, specifically subheading 8543.89.96, HTSUS, as “[e]lectrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: Other: Other: Other….” The articles meet the terms of the heading text.
Insofar as the assembled multi-die products are not described by heading 8542, HTSUS, the last paragraph of Note 5 to Chapter 85 does not apply. With respect to Kionix’s argument that the correct classification of an article is in Heading 8542, HTSUS if that heading might cover the good, this is a misstatement of Note 5 to Chapter 85. Note 5 to Chapter 85 refers to any heading other than 8541 or 8542 that might cover the article in question. In fact, the terms of heading 8543, HTSUS describe the goods and they are classified there.
II. 9802
The protestant also makes a claim for partial duty exemption under 9802.00.80, HTSUS. Subheading 9802.00.80, HTSUS, provides a partial duty exemption for:
[a]rticles assembled abroad in whole or in part of fabricated components, the product of the United States, which (a) were exported in condition ready for assembly without further fabrication, (b) have not lost their physical identity in such articles by change in form, shape, or otherwise, and (c) have not been advanced in value or improved in condition abroad except by being assembled and except by operations incidental to the assembly process, such as cleaning, lubricating and painting.
Your office agrees that protestant has a valid claim for entry under subheading 9802.00.80, HTSUS. You note that documentation and a spreadsheet were submitted. We have reviewed that information and agree with your conclusion.
HOLDING:
1) By application of GRI 1, the assembled multi-die products are classified in heading 8543, HTSUS, specifically subheading 8543.89.9695, HTSUSA (annotated), as “[e]lectrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: Other: Other: Other…Other,” with a column one, general duty rate of 2.6% ad valorem. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usits.gov/tata/hts/.
2) We find that allowances in duty under subheading 9802.00.80, HTSUS, may be made for the assembled multi-die products that were imported into the U.S.
The protest should be DENIED in part and ALLOWED in part. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division