CLA-2 CO:R:C 555638 RA
Mr. Luis Chavez
Kemp, Smith, Duncan & Hammond
P.O. Drawer 2800
El Paso, Texas 79999-2800
RE: Applicability of subheading 9802.00.80, HTSUS, to
thyristor chips sawed from silicon slices.Incident-
al operations;U.S. v. Texas Instruments.
Dear Mr. Chavez:
This is in response to your letter of April 11, 1990,
regarding the tariff treatment of thyristor chips separated
from silicon slices in Mexico before being assembled into
operative thyristors. You inquire as to the applicability of
subheading 9802.00.80, Harmonized Tariff Schedule of the
United States (HTSUS).
FACTS:
You state that TECCOR Electronics Inc. of Irving, Texas,
is assembling thyristors in Mexico and plans to utilize chips
arranged in rows and columns on silicon slices with so-called
"streets" separating them from one another. The silicon
slices containing hundreds of chips delineated by streets will
be sawed along the streets. When the individual chips are
separated, they are ready for assembly into operative
thyristors without any further fabrication.
ISSUE:
Whether the separation of the individual chips by sawing
them apart along the streets indicated on the silicon slices
is considered an operation incidental to their assembly into
thyristors, thereby rendering them eligible for an allowance
in duty under subheading 9802.00.80, HTSUS.
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LAW AND ANALYSIS:
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.
All three requirements of subheading 9802.00.80, HTSUS, must
be satisfied before a component may receive a duty allowance.
An article classified under this tariff provision is subject
to duty upon the full value of the imported assembled article
less the cost or value of the U.S. components, provided the
documentation requirements of section 10.24, Customs
Regulations (19 CFR 10.24), are met.
You contend that the value of the chips used in
assembling the imported thyristors should be deducted when
computing the duty to be assessed as the chips are complete
when they are exported from U.S. and need only be separated
before assembly into the imported product. You stated that
the chips are specifically arranged on the silicon slice to
produce "streets" along which the sawing will be done to
separate the individual areas.
In The U.S. v. Texas Instruments Inc., C.A.D. 1178, 545
F. 2d 739 (1976), the appellate court held that scoring and
breaking a silicon slice along provided so-called "streets" to
separate individual transistor areas did not amount to further
fabrication of the areas and, therefore, could be considered
incidental to the assembly process.
In your case, the individual areas are separated by
sawing instead of scoring and breaking which were utilized in
the court case. However, the result achieved is similar and
the desired chips are merely separated from each other without
any change in their characteristics. Accordingly, the
separation process is not considered to be a further
fabrication or advancement in value of the chips which are
subsequently assembled into the imported thyristors. Thus,
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the separation process may be treated as an operation
incidental to assembly within the scope of the provision in
subheading 9802.00.80, HTSUS.
HOLDING:
The separation of individual thyristor chips by sawing a
silicon slice is not considered to be a further fabrication
and is incidental to the assembly of the imported thyristors.
The U.S.-made chips are eligible for the allowance in duty
provided for in subheading 9802.00.80, HTSUS, provided the
documentary requirements of 19 CFR 10.24 are satisfied.
Sincerely,
John Durant, Director
Commercial Rulings Division
RARNOLD:lw 5/24/90