CLA-2 OT:RR:CTF:EMAIN H293625 SKK
Port Director
U.S. Customs and Border Protection
Port of Dallas/Ft. Worth
P.O. Box 619050
DFW Airport, TX 75261-9050
Attn: Cleatus P. Hunt, Jr., Port Director
RE: RF Generator; Application for Further Review of Protest Number 5501-17-100601; machine; semiconductor wafer plasma processing; physical vapor deposition.
Dear Port Director:
This is in response to an Application for Further Review (AFR) of Protest No. 5501-17-100601, timely filed on September 25, 2017, by Applied Materials, Inc. (Protestant). The AFR concerns U.S. Customs and Border Protection’s (CBP) classification of a radio frequency (RF) Generator under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The subject articles are described as RF Generators (408 Volt AC, 40.63 MHz, 7kW) under Applied Materials part number 0190-43214.
Seven entries of the subject merchandise were made at the Port of Dallas/Ft. Worth between September 2, 2016, and October 28, 2016, and liquidated between July 14, 2017, and September 8, 2017, under subheading 8486.90, HTSUS, which provides for parts and accessories of machinery or apparatus of a kind used solely or principally for the manufacture of semiconductor devices. Protestant argues that the subject merchandise is properly classified in subheading 8486.20, HTSUS, which provides for machines and apparatus for the manufacture of semiconductor devices or of electronic integrated circuits.
As a general matter, RF Generators produce RF power for specific uses. The subject RF Generators are manufactured by Advanced Energy Industries, Inc. and are designed to Applied Materials’ specifications for use in plasma physical vapor deposition (PVD) semiconductor wafer processes.
The RF Generators function by using alternating current (AC) from a public power source to generate and amplify electromagnetic radio waves to a specified power level. The RF waves are delivered by coaxial cable to an impedance RF Match Network (designed to convert or match the impedence of the plasma processing chamber to 50 Ohms so as to match the impedence of the RF Generator), and then transmitted by coaxial cable to an electrode located within a sealed vacuum PVD process chamber containing semiconductor gas. The RF waves ignite the gas and transform it into plasma. The plasma interacts with a metal sputtering agent to deposit thin metal film on the silicon wafers located in the processing chamber.
The Protestant states that currently all RF Generators for use with semiconductor plasma processing systems, including the subject units, incorporate the following combination of components:
An “input power connector” which allows AC current from a public utility to flow into the RF Generator.
A “rectifier” subsystem that allows AC current from the external power source to flow in only one direction, thereby changing AC to direct current (DC) power. This subsystem incorporates diodes (which allow the electromagnetic force to move in only one direction) and capacitators and/or indictors which stabilize the level of electric current.
A subsystem that generates the RF signal frequency and wave form (sinusoid). The signal and wave form are set by either a single frequency RF oscillator and variable attenuator or a direct digital synthesis module.
A “RF amplifier” that raises the RF power level from watts to kilowatts while maintaining the same RF frequency and wave form.
An “output filter” system that further limits and defines the RF frequency of the waves generated, preventing RF frequencies from exiting the RF generator.
A “user interface” subsystem that enables the user to communicate with the RF Generator. The communication takes place by protocols such as Device Net, Lon Works, Ethernet, Serial, or Analog.
“Controls,” which are a combination of analog and digital circuitry that coordinate the operation of the RF Generator’s various parts and components to prevent unwanted power output
“Logic,” which is the built-in software instructions used to monitor and set the parameters for the various controls.
“Instrumentation” used by the operator to monitor and measure the various functions of the RF Generator, including RF and DC voltage and current, among other things.
The Protestant states that the subject RF Generators are not stock units sold by suppliers for use in multiple industries; rather, they are manufactured to Applied Materials’ specifications as to hardware, software and firmware configuration, functional and electrical interface, and safety and labelling requirements. The Protestant further notes that, as configured, they are produced by specific manufacturers and exclusively sold to Applied Materials for their specified use in semiconductor wafer plasma processing tools. The subject RF Generators are also certified compliant with SEMI (Semiconductor Equipment and Materials International) standards for semiconductor manufacturing equipment.
ISSUE:
Whether the subject RF Generators are classified under subheading 8486.20, HTSUS, as machines and apparatus for the manufacture of semiconductor devices or of electronic integrated circuits or under subheading 8486.90.00, HTSUS, as parts thereof.
LAW AND ANALYSIS:
This matter is protestable under 19 U.S.C. 1514(a)(2) as a decision on classification. The protest was timely filed on September 25, 2017, within 180 days of liquidation, pursuant, to 19 U.S.C. 1514(c)(3). Further review of Protest 5501-17-100601 is properly accorded to Protestant pursuant to 19 CFR §§ 174.24(c) and 174.25, as this protest involves matters previously ruled upon by the Commissioner of CBP or his designee or by the customs courts but facts are alleged or legal arguments presented which were not considered at the time of the original ruling. In this regard, Protestant submits that the U.S. Court of International Trade (CIT) in ENI Technology Inc. v. United States, 641 F. Supp. 2d 1337 (CIT 2009), based classification of RF Generators of a kind substantially similar to those at issue on a version of the Harmonized System (HS) that pre-dated the February, 2007, amendment to the HS that created new heading 8486, HTSUS, that prima facie provides for the subject merchandise. Accordingly, ENI Technology Inc. v. United States is not precedential for purposes of the subject commodity. The AFR was forwarded for our consideration.
Classification under the HTSUS is in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods will 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 will then be applied in order.
GRI 6 provides that classification of goods at the subheading level will be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the preceding GRIs on the understanding that only subheadings at the same level are comparable.
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 Machines and apparatus for the manufacture of semiconductor devices or of electronic
integrated circuits:
* * *
8486.90 Parts and accessories:
The General Notes to Section XVI provide, in pertinent part:
* * * *
2. Subject to Note 1 to this Section, Note 1 to Chapter 84 and Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 84.84, 85.44, 85.45, 85.46 or 85.47) are to be classified according to the following rules:
Parts which are goods included in any of the headings of chapter 84 or 85 (other than
headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;
Other parts, if suitable for use solely or principally with a particular kind of machine, or
with a number of machines of the same heading (including a machine of heading 84.79 or 85.43) are to be classified with the machines of that kind or in heading 84.09, 84.31, 84.48, 84.66, 84.73, 85.03, 85.22, 85.29 or 85.38 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 85.17 and 85.25 to 85.28 are to be classified in heading 85.17.
* * *
* * * * *
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).
(C) 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:
* * *
(c) Physical Vapour Deposition (PVD) equipment, which deposit various types of
films which are obtained by vaporizing a solid. For example:
* * *
(2) Sputtering equipment, in which the film is generated by bombarding the
source material (target) with ions.
Heading 8486, HTSUS, provides for, in pertinent part, “[M]achines 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.” As an initial matter, it is noted that the subject RF Generators are described by common dictionary definitions of “machinery” and “apparatus” in that they function to generate power at a fixed radio frequency.
We next consider whether the subject RF Generators are “of a kind used solely or principally for the manufacture of semiconductor devices or electronic integrated circuits.” 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, the United States Court of International Trade (CIT) has provided factors to apply that are indicative, but not conclusive, in this determination. These factors include: general physical characteristics; the expectation of the ultimate purchaser; channels of trade; environment of sale; use in the same manner as merchandise which defines the class; economic practicality of so using the import, and; recognition in the trade of this use. See Kraft, Inc., v. United States, USITR, 16 CIT 483, (June 24, 1992); G. Heilman Brewing Co. v. United States, USITR, 14 CIT 614 (Sept. 6, 1990); and United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F.2d 373 (1976), cert. denied, 429 U.S. 979.
In ENI Technology Inc. v. United States, 641 F. Supp. 2d 1337 (CIT 2009), the Court concluded that RF Generators of a kind substantially similar to those at issue (i.e., RF Generators imported for use with PVD apparatus) were principally used in the manufacture of semiconductor devices, noting:
Despite the potential for other industrial uses, ENI has presented evidence that its RF Generators are principally used by its consumers in plasma processing applications. ENI also offers evidence to show that RF Generators are primarily used specifically for plasma processing of semiconductors. One study cited by ENI states that, on average in 2002 through 2004, over 80 percent of RF Generators sold in the United States were used for semiconductor manufacturing. (See Pl.'s Mem., Ex. 2 at Ex. B.).
ENI Technology Inc. v. United States at 1347. In applying the criteria set forth in United States v. Carborundum Company, set forth supra, the Protestant further notes that the RF Generators manufactured to Applied Materials’ specifications are specially designed for use with Applied Materials’ plasma wafer processing tools, which are solely used in the manufacture of semiconductors or electronic integrated circuits and that the manufacturer only sells these RF Generators to Applied Materials. Therefore, the subject RF Generators are marketed for sole use in the manufacture of semiconductors and electronic integrated circuits and exclusively sold in channels of trade for machines of heading 8486, HTSUS. The ultimate purchaser solely uses these RF Generators in the manufacture of semiconductors or electronic integrated circuits and the trade recognizes semiconductors and electronic integrated circuit manufacturing as the sole use for these Applied Materials RF Generators.
Based on the foregoing, the subject RF Generators are described by heading 8486, HTSUS, in that they are machines of a kind used solely or principally for the manufacture of semiconductor devices and electronic integrated circuits. This is supported by Note 2(a) to Section XVI, HTSUS, which provides rules governing the classification of articles as “parts” of machinery of Section XVI, HTSUS and directs that articles classifiable as goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548), HTSUS, are to be classified in their respective headings.
Because the RF Generator is a machine in itself, that functions to generate power at a fixed radio frequency, it is specifically provided for in subheading 8486.20.00, HTSUS, which provides for “[M]achines and apparatus for the manufacture of semiconductor devices or of electronic integrated circuits.” Accordingly, the subject RF Generators are classified in subheading 8486.20, HTSUS, by application of GRI 1, Note 2(a) to Section XVI, and GRI 6. See also Headquarter Ruling Letter (HQ) H122279, dated May 29, 2015, in which CBP classified a Mercury RF Match, primarily used in conjunction with RF generators of the type at issue to match the output impedance of the RF generator, in subheading 8486.20.00, HTSUS, as machines and apparatus for the manufacture of semiconductor devices or of electronic integrated circuits.
HOLDING:
By application of GRI 1, Section XVI Note 2(a), and GRI 6, the RF Generators imported for principal use with PVD apparatus for the processing of semiconductors are classified in heading 8486, HTSUS, specifically subheading 8486.20, HTSUS, which provides for “[M]achines 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.”
The 2018 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/.
You are instructed to ALLOW the protest. 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 CBP Form 19, to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, CBP will make the decision available to CBP personnel and the public via www.cbp.gov, the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division