MAR-2-85:OT:RR:NC:N2:209
David Romero
Senior Trade Compliance Manager
Cobham Colorado Springs
4350 Centennial Blvd
Colorado Springs, CO 80907
RE: The country of origin and marking of integrated circuits
Dear Mr. Romero:
In your letter dated July 20, 2020, you requested a country of origin and marking ruling.
The item concerned is referred to as the BA06 integrated circuit (IC). This IC was designed by Cobham in Colorado Springs, CO to their customer’s operating specification.
An IC design database (GDSII) is submitted to the company X-Fab in Malaysia, who produces the photolithography plates (reticles) from which X-Fab fabricates the silicon wafers. Each wafer contains approximately 7,000 BA06 die.
After completion of the BA06 wafer fabrication in the resulting 200mm wafers (25 wafers per wafer lot) are shipped by X-Fab to Cobham in Colorado Springs, CO.
Cobham receives the wafers (wafer lot) from X-Fab along with X-Fab’s certificate of conformance. Cobham performs an electrical probe of each of the BA06 die to identify functionally good die from bad die. A “good die wafer map” indicating good die locations per wafer is recorded. After completion of the wafer probe, the wafer lot is packaged and shipped to Unisem Chengdu Co. Ltd., in China.
Unisem Chengdu receives the wafer lot and provides the following processes:
- Back-grind (thin each wafer from 25mils to 10mils),
- Saw (cut each wafer up to separate the individual die on the wafer)
- Die pick the good die off of each wafer using the “good die wafer map”
These “cingulated” good die are then individually attached and wire-bonded to an organic printed circuit board (PCB) substrate. The whole PCB board is coated in plastic that hardens, after which, the individual BA06 units (now encapsulated in plastic) are sawn apart to cingulate plastic packaged BA06 ICs.
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 wafers (which contain the completed integrated circuits) manufactured within Malaysia do not undergo a substantial transformation as a result of the manufacturing process that takes place in China. They retain their identity as integrated circuits with a predetermined end use. Therefore, since a substantial transformation does not occur as a result of the Chinese manufacturing/assembly process, the country of origin of the finished BA06 integrated circuits will be Malaysia for origin and marking purposes at time of importation into the United States.
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].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division