Kelley Drye & Warren LLP
3050 K Street, N.W.
Washington, DC 20007
RE: The country of origin of a flash memory product
Dear Ms. McCadney:
In your letter dated June 10, 2022, you requested a country of origin and marking ruling on behalf of your client, Infineon Technologies Americas Corp.
The items concerned are referred to as the IFX NOR Flash Memory products in 65nm Mirror Bit Technology Node (“NOR Flash Memory products”).
The production process for the “NOR Flash Memory products” is divided into four basic phases: (1) the front-end production process, which occurs in the United States (U.S.) or China; (2) wafer sort in the U.S., Japan, or Taiwan; (3) the back-end packaging process, which occurs in Taiwan or Thailand; and, (4) final test which occurs in China or Thailand.
The front-end processing determines all inherent electrical performance parameters of the “NOR Flash Memory products” and, therefore, determines the products’ use and function. The process begins with raw wafers or substrates and ends with structured wafers prepared for packaging.
The front-end processing which takes place in the U.S. or China, consists of altering the raw wafer or substrate using the following processes:
Film deposition. This process grows, coats, and otherwise transfers certain materials onto the wafer.
Lithography process. The lithography process transfers the pattern from a photomask onto a layer of photoresist on the surface of wafer.
Etching. The etching process helps structure the wafer’s layers (e.g., contacting layers, alignment marks, etc.) by removing excess material.
Ion implantation. This process implants the ion into the silicon layer on the wafer by accelerating the ion onto the wafer, which modifies the conductivity of the semiconductor.
Resist removal and cleaning. This process cleans and strips the wafer of unnecessary defects and materials, including the photoresist layer.
Thermal processing. The substrate or raw wafer is placed into a furnace and subject to thermal processing.
Metrology. This process occurs at several phases throughout the overall production process, and involves taking key measurements of the wafer.
Defect Inspection. The wafers are scanned with an optical or electron microscope to search for particles that have fallen on the wafer or other misstructuring that occurred during a single manufacturing process step.
Chemical mechanical polishing. This phase smooths the wafer surfaces with a combination of both chemical and mechanical forces.
The wafers then undergo an electrical testing process to screen out defective chips. This wafer sort takes place within the U.S., Taiwan, or Japan.
Following the wafer sort, the wafers are shipped to Infineon’s back-end site in Thailand or Taiwan for packaging. In Thailand or Taiwan, Infineon attaches the chips to a copper lead frame using a die bond and wire bond as well as an encapsulation process.
Finally, the chips are sent to Thailand or China for their final electrical testing procedure.
The marking statute, Section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.
The “country of origin” is defined in 19 CFR 134.1(b) as “the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the 'country of origin' within the meaning of this part.”
For tariff purposes, the courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982).
However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987).
Based upon the facts presented, it is the opinion of this office that the front-end manufacturing process that takes place in the U.S. or China, imparts the essence to the “NOR Flash Memory products”. The wafers, (which contain the die incorporating the complete circuitry) manufactured within the U.S. or China do not undergo a substantial transformation as a result of the subsequent processing (i.e. testing, sorting, back-end processing/packaging, final testing), that takes place in the various countries cited above. They retain their identity with a predetermined end use. Therefore, the country of origin for marking purposes would be the country where the front-end processing takes place, either the U.S. or China. The “NOR Flash Memory products” should be legibly, conspicuously, indelibly, and permanently marked in accordance with the requirements of 19 U.S.C. 1304 to indicate its country of origin.
It should be noted that when the country of origin is the United States, the “NOR Flash Memory products” would not be required to have any country of origin marking pursuant to 19 U.S.C. 1304 when imported into the United States.
Whether an article may be marked with the phrase “Made in the USA” or similar words denoting United States origin, is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you contact the FTC Division of Enforcement, 600 Pennsylvania Avenue, N.W.,
Washington, D.C. 20580 on the propriety of proposed markings indicating that an article is made in the U.S.
Additionally, when the front-end processing takes place in China, the country of origin of the “NOR Flash Memory products”, for the purpose of 301 Trade Remedies, would be China.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Steven Pollichino at [email protected]
Steven A. Mack
National Commodity Specialist Division