CLA-2-85:RR:NC:MM:109 C89860
Mr. Jack Kilmartin
Import Manager
Yamato Customs Brokers U.S.A., Inc.
377 Swift Avenue
South San Francisco, CA 94080
RE: The tariff classification of and the applicability of subheading
9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to gallium
arsenide integrated circuits (ICs) assembled in Japan
Dear Mr. Kilmartin:
In your letter dated June 26, 1998, you requested a tariff classification
ruling on gallium arsenide (GaAs) integrated circuits and the applicability of
subheading 9802.00.80, HTSUS. Your request is on behalf of your client, SMOS
Systems, Inc.
Your letter describes the United States manufacturing process and the
foreign assembly process. A supplemental letter was submitted on July 30, 1998,
clarifying the wafer material. SMOS Systems procures application specific
integrated circuit (ASIC) dice from Vitesse Semiconductor, Inc. Vitesse
manufactures these integrated circuits in the United States at their facility in
Santa Clara, California. The integrated circuits are manufactured on wafers of
gallium arsenide. Each wafer is subjected to processes that embed an integrated
circuit onto its surface. The wafer is then scribed along lines drawn on its
surface, and cut into individual dice. The number of integrated circuit dice
per wafer vary from 50 to 3000 depending on the size of the wafer and the size
of the circuit. The completed IC dice are supplied to SMOS Systems on sticky
paper tape.
SMOS Systems sends the dice to Seiko Epson Corporation of Japan, where they
are assembled into completed integrated circuits. The IC die is placed in and
bonded to the lead frame and encapsulated in a plastic housing.
Subheading 9802.00.80, HTSUS, provides a partial duty exemption for:
Articles . . . 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 entered under this
tariff provision is subject to duty upon the full cost or value of the imported
assembled article, less the cost or value of the United States components
assembled abroad, provided that the section 10.24, Customs Regulations (19
C.F.R. §10.24), documentary requirements are satisfied.
Section 10.14(a), Customs Regulations (19 C.F.R. §10.14(a)), states, in
part, that:
The components must be in condition ready for
assembly without further fabrication at the time of their exportation from the
United States to qualify for the exemption. Components will not lose their
entitlement to the exemption by being subjected to operations incidental to the
assembly either before, during, or after their assembly with other components.
Therefore, the United States manufactured dice are eligible for the
allowance in duty provided for in subheading 9802.00.8065, HTSUS, provided the
documentary requirements of 19 C.F.R. §10.24 are satisfied.
The applicable subheading for the gallium arsenide ICs will be
8542.13.8096, Harmonized Tariff Schedule of the United States (HTSUS), which
provides for "[m]onolithic digital integrated circuits: [m]etal oxide
semiconductors...[o]ther...[o]ther: [o]ther, including logic." The rate of duty
will be free.
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 Eileen S. Kaplan at 212-466-5673.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division