CLA-2 RR:CR:GC 965020 BJB
George R. Tuttle
Three Embarcadero Center, Suite 1160
San Francisco, CA 94111
RE: Memory boards
Dear Mr. Tuttle:
This is in response to a letter dated November 6, 2001, from Atmel Corporation, to the Customs National Commodity Specialist Division, New York, requesting a ruling on the classification of a memory board with combined flash memory and static random access memory (“memory boards”), pursuant to the Harmonized Tariff Schedule of the United States (HTSUS). Atmel’s letter was referred to this office for reply. By letter of December 26, 2001 you advised that your firm had been retained by Atmel Corporation to represent them in this matter. Additional submissions of November 5, 2001, April 9, 25, and 26, 2002, have been taken into consideration in preparing this ruling.
The subject memory boards are described as being composed of a single flash memory integrated circuit and a single static random access memory (“SRAM”) integrated circuit. These chips are placed one on top of the other and glued together with epoxy. They are then wire-bonded to a lead-frame. The lead-frame is composed of two signal layers to prevent shorting of the circuits.
The memory boards are incorporated into electronic products requiring compact SRAM and flash memory storage. You have submitted three different lists of memory board model numbers, including a schedule with 61 different product model numbers. Your April 25 and 26, 2002 submissions reference additional memory board model numbers. You state all of these model numbers are “Flash/SRAM double-stacked memory chips,” and “differ only in the amount of memory of the chips and in the pin configurations of the modules.”
The memory boards are used to integrate information management applications including faxes, e-mail, global positioning systems, telephone directories, airline and other on-line reservations, maps, internet browsing, and news clipping services. They are for use in a variety of host devices, including digital cameras, handheld ADP machines, radios, personal digital assistants (“PDAs”), personal communicators/pagers, audio recorders/MP3s, and cellular telephones.
In its November 6, 2001 request for a ruling of two memory boards, Atmel sought classification under subheading 8542.13.80, HTSUS, which provides for “[e]lectronic integrated circuits: Monolithic digital integrated circuits: Metal oxide semiconductors: Other: Other, silicon: Other memory: Other.” In a Notice of Action, dated October 11, 2001, Customs reclassified certain memory board models under subheading 8543.89.96, HTSUS.
Atmel now seeks classification of the subject memory boards under subheading 8541.21.00, which provides, for in pertinent part, “transistors” with “a dissipation rate of less than 1 Watt and less than 100 MHz,” or under subheading 8541.50.00, as “other semiconductor devices.” Alternatively, you claim the memory boards are classifiable under headings 8523, as “[p]repared unrecorded media,” 8529, as “parts of cellular phones,” or 8548, as “[e]lectrical parts of machinery, not specified or included elsewhere in Chapter 85.”
What is the classification of the subject memory boards?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined 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 may then be applied.
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 generally indicative of the proper interpretation of these headings. Customs believes the ENs should always be consulted. See T.D. 98-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
The HTSUS provisions under consideration are as follows:
Prepared unrecorded media for sound recording or similar recording of other phenomena, other than products of chapter 37:
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Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528:
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Diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes; mounted piezoelectric crystals; parts thereof:
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8543 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter, parts thereof:
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Waste and scrap of primary cells, primary batteries and electric storage batteries; spent primary cells, spent primary batteries and spent electric storage batteries; electrical parts of machinery or apparatus, not specified or included elsewhere in this chapter:
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At GRI 1, you claim that these memory boards, including those recently added, should be classified under heading 8541, which provides for “[d]iodes, transistors and similar semiconductor devices; photosensitive semiconductor devices[.]”
Chapter 85, legal note 5, in pertinent part, provides that “[f]or the classification of the 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.” Thus, before considering headings 8523, 8543, or 8548, HTSUS, we must first consider heading 8541, HTSUS.
Heading 8541, HTSUS, provides for “transistors and similar semiconductor devices.” You claim that heading 8541, “clearly encompasses semiconductors in the form of chips, die, and wafers[,]” and as an “eo nomine” provision, covers all forms of such articles, including the subject goods. Thus, you claim the memory boards are classifiable under heading 8541, because they are devices produced by “complementary metal oxide semiconductor (“CMOS”) wafer technology, and contain millions of transistors.
However, the memory boards are not merely a series of transistors. The transistors are located in, and only a portion of, the components of fully integrated circuits. The typical flash or SRAM integrated circuits must have many other devices in addition to transistors. They contain capacitors, resistors, and other components.
Moreover, the flash memory and SRAM integrated circuits are components that are then mounted on a lead-frame to create a memory board. The memory boards also contain other components including a lead-frame, connector pins, and wire leads.
Heading 8541 covers five groups of goods, each separated by a semi-colon. Transistors are in the first group with diodes and similar semi-conductor devices. Note 5(a) to chapter 85 defines diodes, transistors and similar semiconductor devices as semiconductor devices the operation of which depends on variations in resistivity on the application of an electric field. EN 85.41(A)(II) further describes transistors, in pertinent part, as “three- or four-terminal devices capable of amplification, oscillation, frequency conversion, or switching of electrical currents.”
EN 85.41(B)(2)(i) provides that, “the heading does not cover panels or modules equipped with elements, however simple, (for example, diodes to control the direction of the current), which supply the power directly to, for example, a motor, and electrolyser (heading 85.01).” (Emphasis in the original.)
In HQ 962957, dated October 23, 2000, Customs determined that the heading does “not include combinations of goods from two or more distinct groups enumerated in heading 8541, or combinations of goods of heading 8541 and another heading, when the combination of goods do not contribute to a single function covered by a single group enumerated in heading 8541.” The capacitors, resistors, and other components of the flash and SRAM integrated circuits, and the additional components of the memory boards, are not covered by a single group of devices enumerated in heading 8541, HTSUS.
Moreover, in considering the classification of thyristor modules, held classifiable as “similar semiconductor devices” of the same group as diodes and transistors, the court in ABB Power Transmission v. U.S., 19 CIT 1044 (1995), the court also held that “. . .the principal and sole function of a thyristor module is imparted by the thyristors acting in unison. . ..”
Unlike the thyristor modules in ABB, the present transistors do not impart the principal and sole function of the subject memory boards. The components of the subject memory boards, and of their integrated flash memory and SRAM circuits, act in unison to provide data storage and memory, not to function as transistors. You have provided insufficient information on the construction of the memory boards to support further consideration of heading 8541.
You claim that the memory boards are solely or principally for use in cellular telephones, and are therefore classifiable under heading 8529, which provides for “[p]arts suitable for use solely or principally with the apparatus of headings 8525 to 8528[.]” Insufficient evidence to support this claim has been provided. A letter of April 26, 2002, from an Atmel product engineering manager, states, “[t]o my knowledge, all of the modern cell phones employ Flash and SRAM memories to store data; and therefore, the conclusion reached by the industry has been to fit these Flash and SRAM chips together on a single combined module in order to save board “real estate . . ..” The issue, however, is not whether the memory boards are used in all cellular telephones, but whether these boards are of a class or kind of part, solely or principally used in goods of headings 8525 to 8528.
Over 168 entries of Atmel memory boards are presently in open or suspended liquidation status with Customs. From the documentation provided, 17 different model memory boards have been identified among these 168 entries. The schematics and information provided by you directly relate to only 3 of those goods. None of the schematics and supporting information relate to triple stacked chip memory boards or the product model numbers referenced in Atmel’s April 26, 2002 supplementary submission.
Thus, even though the memory boards are utilized in cellular telephones, they are not classifiable under heading 8529, because they are neither parts of cellular telephones, nor suitable for use solely or principally with the transmission or reception apparatus of headings 8525 to 8528.
You also claim that the memory boards constitute “prepared unrecorded media” provided for under heading 8523, HTSUS. Flash memory cards used with a number of electronic devices were recently held classifiable under this heading. In HQ 962845, dated February 27, 2001, and HQ 964875, dated March 27, 2002, Customs considered the classification of flash memory cards designed to record music, pictures, and data in conjunction with a variety of recording devices. The ready portability and interchangeability of the flash cards, facilitated by easy removal and insertion from the host devices, were essential aspects in determining their function as “prepared unrecorded media.” The instant memory boards do not function in this manner.
Heading 8543 covers electrical machines and apparatus, having individual functions, not specified or included elsewhere in chapter 85, and parts thereof. The memory boards provide additional memory for use in a variety of handheld electronic and communication devices. The memory boards provide flash and SRAM memory. Their purpose is to combine the benefits of non-volatile data block storage of the flash memory chip, with the accelerated access to stored data, provided by the SRAM. Thus, they have an individual function, specifically provided for in this heading. They are not covered more specifically by a heading of any other chapter of the Nomenclature, nor excluded by the Legal Notes to Section XVI, or Chapter 85. Further, heading 8543 is more specific than heading 8548, HTSUS.
Heading 8548 provides for, in pertinent part, “electrical parts of machinery or apparatus, not specified or included elsewhere in this chapter[.]” The EN to heading 8548 indicates that the heading also includes all electrical parts of machinery or apparatus, other than those suitable for use solely or principally with a particular machine or appliance, parts covered by an earlier heading of this Chapter or which are excluded by Note 1 to Section XVI, and articles which are identifiable as electrical parts of machinery or apparatus but not as parts of a particular machine or apparatus, and which incorporate electrical connections[.]” (see EN 85.43(B)).
You claim the memory boards: 1) are “used to store names, addresses, telephone number data, and other binary data used by [a] phone”; 2) are “electrical parts that are incorporated into electronic products requiring compact SRAM and Flash memory storage”; and 3) derive their functionality from a cell phone itself.
In Rollerblade, Inc., v. U.S., CAFC, No. 01-1049, (decided March 5, 2002), the court affirmed that a “part” “must have a direct relationship to the primary article, rather than the general activity in which the primary article is used.” It is clear that these memory boards, designed for use with a variety of electronic devices, are also sold independently of them. Their individual function is to provide additional memory and accelerated access to it. As such they are separate and distinct goods. They are not an essential element or constituent, integral portion of the telephones, PDAs, or global positioning systems with which they are used.
Finally, you have not demonstrated how storing addresses, and telephone numbers, is an essential or indispensible activity of a telephone. Although this activity may provide additional convenience to the cellular telephone or PDA user, it does not make a good a “part,” where it “does not appear essential to making a device work[.]” (Rollerblade, Inc., v. U.S., supra.) Absent further evidence that these goods are electrical “parts” of machinery or other apparatus provided for, they are not classifiable under heading 8548, HTSUS.
The subheading which describes the memory boards is 8543.89.96, HTSUS, which provides for “[e]lectrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter, parts thereof: Other: Other.” Having established that the subject merchandise satisfies the terms provided in heading 8543, HTSUS, at GRI 1, consideration of any other headings is precluded.
At GRI 1, the memory boards with a flash memory chip and a SRAM chip are classifiable in subheading 8543.89.96, HTSUS, which provides for “[e]lectrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter, parts thereof: Other: Other.”
John Durant, Director
Commercial Rulings Division