CLA-2 OT:RR:CTF:TCM H122279 CkG
Law Offices of George R. Tuttle
One Embarcadero Center, Suite 730
San Francisco, CA 94111-4044
Re: NY L84849 revoked by operation of law; classification of an RF Match
Dear Mr Tuttle,
This is in reference to your request for reconsideration of NY L84849 initiated by the manufacturer of a substantially similar RF Match, Advanced Energy Industries (AEI). In New York Ruling Letter (NY) L84849, issued to Novellus Systems, Inc. on June 13, 2005, CBP classified the RF Match in heading 8504, HTSUS, as an electrical transformer. However, since the issuance of NY L84849, the Harmonized tariff Schedule of the United States (HTSUS) has been amended to include heading 8486, which provides for machines of a kind used solely or principally for the manufacture of semiconductor boules or wafers, semiconductor devices, electronic integrated circuits or flat panel displays. Therefore, if the merchandise at issue is classified in the new heading, NY L84849 is revoked by operation of law. We find that the RF Match is classified in heading 8486 and our analysis follows.
FACTS:
The subject impedance matching network is known by the trade name “Mercury”. The device is used to adjust the impedance of the output of an RF generator in order to deliver a matched output to the plasma enhanced chemical vapor deposition machine’s plasma chamber. Chemical vapor deposition is a process used to deposit various types of films on the surface of materials such as semiconductor wafers.
NY L84849 described the subject merchandise as follows:
The RF Match is an impedance matching transformer. The data sheets submitted describes the RF Match as having a power rating of 10 kw (10 kVA). It contains a series of inductor coils, variable capacitors, and an electrical motor, which moves the positions of the variable capacitors, thus changing the value of the variable capacitors. The RF Match is utilized in machinery that deposits dielectric film onto a silicon wafer inside a processing chamber, or load. The dielectric film is activated by radio frequency (RF) energy produced by an RF generator. The change in each variable capacitor’s value, which is caused by the electrical motor, allows the output impedance of the RF Match to match the output impedance of the RF generator to that of the attached load (processing chamber) to 50 Ohms.
In AEI’s submission, the process of chemical vapor deposition and the role of the matching network is described as follows:
During a plasma enhanced chemical vapor deposition process, radio frequency power from an RF generator is applied to an electrode that is located in a source unit attached to a deposition chamber. RF voltage causes the gas to ignite and form plasma. The RF generator is typically mounted on a rack that is not attached to the process chamber. Therefore, the RF power must be fed to the chamber by a coax cable. The output impedance of the RF generator as well as the coax cable is of an industry standard impedance of 50 Ohms. In order to maximize the RF power delivery through the coax cable, an Impedance Matching Network is utilized at the process chamber. The matching network will transform the complex impedance of the process chamber, which is connected to its output, to 50 Ohms at its input. This 50 Ohm transformation at the Matching Network input will provide the most efficient RF power transfer from the RF Generator to the process chamber.
ISSUE:
Whether the RF Match at issue is classified in heading 8486, HTSUS, as machines and apparatus of a kind used for the manufacture of semiconductors or flat panel displays, or heading 8504, HTSUS, as an electrical transformer.
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 2 through 6 may then be applied in order.
The HTSUS provisions under consideration are as follows:
8486 Machines and apparatus of a kind used solely or principally for the manufacture of semiconductor boules or wafers, semiconductor devices, electronic integrated circuits or flat panel displays; machines and apparatus specified in Note 9 (C) to this chapter; parts and accessories:
8486.20.00: Machines and apparatus for the manufacture of semiconductor devices or
of electronic integrated circuits…
8486.90.00 Parts and accessories:.
* * *
8504 Electrical transformers, static converters (for example, rectifiers) and inductors; parts thereof:
8504.40 Static converters:
8504.40.95 Other
8504.90 Parts:
8504.90.95 Other
* * * * *
Note 9 to Chapter 84 provides as follows:
Notes 8 (a) and 8 (b) to Chapter 85 also apply with respect to the expressions
"semiconductor devices" and "electronic integrated circuits", respectively, as used in this Note and in heading 8486. However, for the purposes of this Note and of heading 8486, the expression "semiconductor devices" also covers photosensitive semiconductor devices and light emitting diodes.
…
(C) Heading 8486 also includes machines and apparatus solely or principally of a
kind used for :
(i) the manufacture or repair of masks and reticles;
(ii) assembling semiconductor devices or electronic integrated circuits; and
(iii) lifting, handling, loading or unloading of boules, wafers,
semiconductor devices, electronic integrated circuits and flat panel displays.
Subject to Note 1 to Section XVI and Note 1 to Chapter 841, machines and
apparatus answering to the description in heading 8486 are to be classified in that heading and in no other heading of the tariff schedule.
* * *
Note 1 to Chapter 85 provides, in pertinent part, as follows:
This chapter does not cover…
(c) Machines and apparatus of heading 8486
* * *
The Harmonized Commodity Description and Coding System Explanatory
Notes (ENs), constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of the headings. It is CBP’s practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN 84.86 provides, in pertinent part, as follows:
This heading covers machines and apparatus of a kind used solely or principally for the manufacture of semiconductor boules or wafers, semiconductor devices, electronic integrated circuits or flat panel displays. However, this heading excludes machines and apparatus for measuring, checking, inspecting, chemical analysis, etc. (Chapter 90).
MACHINES AND APPARATUS FOR THE MANUFACTURE OF SEMICONDUCTOR
DEVICES OR OF ELECTRONIC INTEGRATED CIRCUITS
This group covers machines and apparatus for the manufacture of semiconductor devices or of electronic integrated circuits such as :
(b) Chemical Vapour Deposition (CVD) equipment, which deposit various types of
films which are obtained by combining the appropriate gases in a reactant chamber
at elevated temperatures. This constitutes a thermochemical vapor-phase reaction.
Operations may take place at atmospheric or low pressure (LPCVD) and may use
plasma enhancement (PECVD).
(c) Physical Vapour Deposition (PVD) equipment, which deposit various types of
films which are obtained by vaporizing a solid. For example:
Evaporation equipment, in which the film is generated by heating the source
material.
Sputtering equipment, in which the film is generated by bombarding the source
material (target) with ions.
EN 85.04 provides as follows:
ELECTRICAL TRANSFORMERS
Electrical transformers are apparatus which, without having any moving parts, transform, by means of induction and using a preset or adjustable system, an alternating current into another alternating current of different voltage, impedance, etc. These usually consist of two or more coils of insulated wire wound in various configurations on laminated iron cores, although in some cases (e.g., radio frequency transformers) there may be no magnetic core, or the core may be of agglomerated iron dust, ferrite, etc. An AC in one coil (the primary circuit) induces an AC usually at different values of current and voltage in the others (the secondary circuit). In certain cases (auto transformers) there is only a single coil, part of the winding of which is common to the primary and secondary circuits. In shell type transformers, there is a shell of laminated iron round the transformer.
Certain transformers are designed for particular purposes, e.g., matching transformers for matching the impedance of one circuit with that of another, and instrument transformers (current or voltage transformers, combined instrument transformers) used to step down or step up voltages or currents to the level of the connected equipment, e.g., measuring instruments, electricity meters or protective relays.
The heading covers all transformers. They vary from ballasts for the control of the amount of current that flows through discharge lamps or tubes, small types used in wireless sets, instruments, toys, etc., to large types enclosed in oil tanks or equipped with radiators, fans, etc., for cooling purposes. The large types are used in electricity stations, stations for interconnecting mains, distributing stations or sub stations. The frequency may vary from mains frequencies up to very high radio frequencies. The heading includes baluns (balancing units) which reduce electro-magnetic interference by balancing the impedance in paired lines.
The power handling capacity of a transformer is the kilovolt ampere (kVA) output based on continual use at the rated secondary voltage (or amperage, when applicable) and at the rated frequency without exceeding the rated temperature limitations.
* * * *
The manufacturer of the instant RF matching device, Advanced Energy Industries (AEI), claims that the subject impedance matching device (referred to as the “Mercury”) is principally used for the manufacture of semiconductor devices and flat panel displays. Machines and apparatus of a kind used solely or principally for the manufacture of semiconductor boules or wafers, semiconductor devices, electronic integrated circuits or flat panel displays are provided for in heading 8486, HTSUS. Note 9(D) to Chapter 84 provides that, subject to the exclusions in Note 1 to Section XVI and Note 1 to Chapter 84, machines and apparatus answering to the description in heading 8486 are to be classified in that heading and in no other heading of the tariff schedule. Similarly, Note 1(c) to Chapter 85 excludes machines and apparatus of heading 8486, HTSUS, from Chapter 85. Thus, if the subject RF matching device is classified in heading 8486, HTSUS, as a machine used principally for the manufacture of semiconductor devices, it is precluded from classification in heading 8504, HTSUS.
The instant impedance matching networks are machinery or apparatus pursuant to common definitions of these terms. If the impedance matching networks are, as claimed, of a kind principally used for the manufacture of semiconductor devices, they must be classified in heading 8486, HTSUS, and cannot be classified in heading 8504, HTSUS.
Heading 8486, HTSUS, provides for “Machines and apparatus of a kind used solely or principally for the manufacture of semiconductor boules or wafers, semiconductor devices, electronic integrated circuits or flat panel displays”. The language “of a kind used” indicates that heading 8486, HTSUS, is a principal use provision.
Principal use is the use of the class or kind of merchandise at issue that exceeds any other use. In determining whether imported merchandise falls within a particular class or kind of goods, United States v. The Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F.2d 373 (1976), considered certain factors to be pertinent:
The physical characteristics of the merchandise
The expectation of the ultimate purchasers
The channels of trade of the merchandise
The environment of sale (accompanying accessories, manner of advertisement and display)
Use in the same manner as merchandise which defines the class
The economic practicality of so using the import
Recognition in the trade of this use.
The instant RF match devices are components of a chemical vapor deposition system or machine. Chemical vapor deposition is a process used to produce thin films, principally for semiconductors, flat panel displays, magnetic data storage devices (thin film magnetic heads), and photovoltaic (solar) cells. Although impedance matching networks of this type can be used in any of the above applications which involve the creation of plasma inside a chamber, plasmas in general are principally used in semiconductor device fabrication including reactive-ion etching, sputtering, surface cleaning and plasma-enhanced chemical vapor deposition. Thus, semiconductor manufacturing represents a significant majority of the market for the use of RF Power Matching Networks. According to a study you submitted by VLSIresearch in 2011 semiconductor manufacturing accounted for over 80% of the market for the use of RF matching networks; that share is projected to increase through 2018. Flat panel display manufacturing accounts for roughly another 10% of sales for RF matching networks.
In addition, the Mercury RF Match is primarily used in conjunction with RF generators of the type at issue in ENI v. United States, 641 F. Supp. 2d 1337 (CIT 2009), which the Court concluded were principally used in the manufacture of semiconductor devices. ENI v. United States at 1346.
Further information on the actual use of the instant products submitted by the manufacturer, AEI, indicates that the Mercury device is used primarily for the manufacture of semiconductors. AEI is a provider of power conversion products for the semiconductor, flat panel display and solar panel markets. AEI sells the Mercury device primarily to Lam Research Corp., Novellus Systems Inc. (now merged with Lam Research Corp.), and Applied Materials, Inc. These are the ultimate purchasers of the Mercury. Both companies specialize in the supply of equipment for the manufacture of semiconductors and flat panel displays as well as solar cells. See e.g., http://www.novellus.com/products (“Our chemical vapor deposition (CVD), physical vapor deposition (PVD), electrochemical deposition (ECD), and surface preparation systems are used worldwide for the volume production of advanced semiconductor devices at the lowest overall cost to our customers.”); http://www.appliedmaterials.com. Each company has also certified that the Mercury device in particular is an integral part of chemical vapor deposition machines used specifically in the manufacture of semiconductors. Hence, the Mercury device is marketed for use in the manufacture of semiconductors and flat panel displays, it is sold in the same channels of trade as machines of heading 8486, the ultimate purchasers of the device use it for the manufacture of semiconductors, and the trade recognizes semiconductor manufacturing as the principal use of this device.
Because the Mercury device is classified in heading 8486, HTSUS, it cannot be classified in heading 8504, HTSUS, pursuant to Note 1(c) to Chapter 85. Furthermore, because the RF Match is a machine in itself, that functions to match the output impedance of the RF generator to that of the attached load (processing chamber) to 50 Ohms, it is specifically classified as such in subheading 8486.20.00, HTSUS, which provides for “Machines and apparatus of a kind used solely or principally for the manufacture of semiconductor boules or wafers, semiconductor devices, electronic integrated circuits or flat panel displays; machines and apparatus specified in Note 9 (C) to this chapter: Machines and apparatus for the manufacture of semiconductor devices or of electronic integrated circuits.”
HOLDING:
The instant impedance matching network is classified in heading 8486, HTSUS, specifically subheading 8486.20.00, HTSUS, which provides for “Machines and apparatus of a kind used solely or principally for the manufacture of semiconductor boules or wafers, semiconductor devices, electronic integrated circuits or flat panel displays; machines and apparatus specified in Note 9 (C) to this chapter: Machines and apparatus for the manufacture of semiconductor devices or of electronic integrated circuits.” NY L84849, dated June 13, 2005, is revoked by operation of law.
The 2015 column one, general rate of duty is Free. 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 online at http://www.usitc.gov/tata/hts/.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division