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HQ 968021




March 3, 2006

CLA-2-RR:CTF:TCM 968021 IOR

CATEGORY: CLASSIFICATION

Tariff No.: 8543.89.96, HTSUS

Mr. Patrick D. Gill, Esq.
Rode & Qualey
55 West 39th Street
New York, NY 10018

RE: Package stacked DRAM

Dear Mr. Gill:

This is in response to your request of October 25, 2005, to the Customs and Border Protection (CBP), National Commodity Specialist Division (NCSD) in New York, for a binding ruling on the classification under the Harmonized Tariff Schedule of the United States (HTSUS), of package stacked DRAM, on behalf of Infineon Technologies Richmond, LP, and Infineon Technologies North America Corp. (“Infineon”). Your ruling request was forwarded to this office by the NCSD for reply. This decision follows a meeting between you and members of your firm, representatives of Infineon, and members of my staff, on February 21, 2006, and receipt of your supplemental submission dated February 22, 2006. Your request for confidential and privileged treatment has been addressed in a separate letter dated February 24, 2006.

FACTS:

The subject merchandise consists of stacked integrated circuits of dynamic random access memory (DRAMs). The stacked DRAMs are package stacked. Package stacked DRAMs consist of two packaged DRAM integrated circuits (ICs) welded together. Package stacking is distinct from die stacking. In die stacking, several bare, or unpackaged die are wirebonded, or otherwise connected to a base or substrate, and then packaged together. You have limited your ruling request to product HYB 25D512400BR, which you state is identical to other stacked DRAM imported by Infineon.

The subject stacked DRAMs are used in the manufacture of memory modules for use in automatic data processing (ADP) machines. The modules are installed on the motherboard of an ADP machine.

It is your position that the subject stacked DRAM is classifiable under heading 8473, HTSUS, as parts suitable for use solely or principally with ADP machines. It is your position that the stacked DRAMs are distinguishable from the stacked memory previously classified by CBP in heading 8543, as electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter, and that they are of a separate class or kind. You assert that the stacked DRAMs are distinguishable because they are dedicated for use in an ADP machine, by virtue of the design of their circuitry, the specifications to which they are packaged, and the manner in which they are packaged.

You have provided us with documentation, including the standards to which the DRAMs are packaged, the standards to which the memory modules are manufactured, Infineon product literature, and an affidavit of an Infineon electrical engineer, Director of the Quality Department.

ISSUE:

Whether the package stacked DRAMs are classified in heading 8473, HTSUS, which provides for parts suitable for use solely or principally with ADP machines, or heading 8543, HTSUS, which provides for electrical machines and apparatus, having individual functions, not specified or included elsewhere in Chapter 85.

LAW AND ANALYSIS:

Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most goods are classified by application of GRI 1, that is, 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 for the stacked DRAMs are as follows:

8473 Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines of headings 8469 to 8472:

8543 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Subject to certain exceptions that are not relevant here, goods that are identifiable as parts of machines or apparatus of Chapter 84 or 85, are classifiable in accordance with Section XVI, Note 2, HTSUS. Nidec Corporation v. United States, 861 F. Supp. 136 (Ct. Int’l Trade 1994), aff’d, 68 F.3d 1333 (Fed. Cir. 1995). Section XVI, Note 2(a), HTSUS, provides that “[p]arts which are goods included in any of the headings of chapter 84 or 85 (other than headings8473) are in all cases to be classified in their respective headings.” Heading 8473, is specifically excluded from Note 2(a). 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, are to be classified with the machines of that kind. Section XVI, Note 2(b), HTSUS. Notwithstanding the fact that the stacked DRAMs may be principally if not solely used as parts of ADP machines, they are goods included in 8543. See HQ 961097, dated May 11, 1998. In this case, we do not reach Note 2(b), because CBP has determined that stacked memory chips are a good included in heading 8543, HTSUS. CBP has classified stacked memory in heading 8543, HTSUS in HQ 966765, dated January 14, 2005, affirming HQ 965020, dated May 13, 2002; HQ 965848, dated November 14, 2002, affirming HQ 965052, dated May 13, 2002; NY J80590, dated February 25, 2003.

In this case, the argument made by Infineon is that the imported stacked package DRAM is in a separate class or kind of merchandise than that memory in HQ 966765. HQ 966765, addressed stacked memory modules used in the mobile industry and in industries in which the most advantageous use of space is critical, such as aerospace, military and other telecommunications. Infineon does not argue that the stacked DRAMs are not described in heading 8543, HTSUS. We find that the stacked DRAMs are described in heading 8543, as they have individual functions.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes (ENs), although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

With respect to individual functions, the EN to 85.43, states that the introductory provisions of EN 84.79 concerning machines and mechanical appliances having individual functions apply, mutatis mutandis, to the appliances and apparatus of 85.43. EN 84.79 provides that with respect to individual functions, the following are to be regarded as having “individual functions”:

(B) Mechanical devices which cannot perform their function unless they are mounted on another machine or appliance, or are incorporated in a more complex entity, provided that this function:

(i) is distinct from that which is performed by the machine or appliance whereon they are to be mounted, or by the entity wherein they are to be incorporated, and

(ii) does not play an integral and inseparable part in the operation of such machine, appliance or entity.

In this case, the stacked DRAMs cannot perform their function unless they are mounted onto another machine, and the memory performs a distinct function. It is asserted that the stacked DRAMs are principally or solely used in an ADP machine. Memory is distinct from that which is performed by an ADP machine, and it does not play an integral and inseparable part in the operation of an ADP machine. Note 5(A), to Chapter 84, HTSUS, with respect to digital machines, defines an “automatic data processing machine” as a machine “capable of (1) storing the processing program or programs and at least the data immediately necessary for execution of the program; (2) being freely programmed in accordance with the requirements of the user; (3) performing arithmetical computations specified by the user; and (4) executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run.”

An ADP machine is capable of performing the above required functions without DRAM. CBP has classified a central processing unit as an ADP machine, although it did not contain any RAM at all, DRAM or otherwise. HQ 957489, dated April 24, 1995.

It is asserted by Infineon that Heading 8543, HTSUS, is a basket provision. A basket provision would be evidenced by the word "other." See The Item Company v U.S., 98 F. 3d 1294, 1296 (CAFC 1996). Classification of imported merchandise in a basket provision is only appropriate if there is no tariff category that covers the merchandise more specifically. See EM Industries v.U.S. , 999 F. Supp. 1473, 1480 (1998) ("'Basket' or residual provisions of HTSUS headings . . . are intended as a broad catch-all to encompass the classification of articles for which there is no more specifically applicable subheading."). In HQ 966041, dated April 29, 2003, citing Sharp Microelectronics Technology, Inc v. United States, 122 F.3d 1446 (Fed. Cir. 1997), it was determined that the terms “not elsewhere specified or included” in heading 9013, HTSUS, does not render the heading a “basket” or non-specific provision. The court in Sharp explained that heading 9013, HTSUS, "is simply another specific provision acknowledging that it may be more or less difficult to satisfy than some other provision, or a more or less accurate or certain provision than some other to describe a particular article." Sharp, at 1450. It is CBP’s position that heading 8543, HTSUS, is not a “basket” provision by virtue of the language “not specified or included elsewhere,” and that in accordance with Section XVI, Note 2(a), the imported stacked DRAMs are classified in heading 8543, HTSUS.

Nevertheless, we will address whether the imported stacked DRAMs are suitable for use solely or principally with ADP machines. When applying a “principal use” provision, we first must ascertain the class or kind of goods involved. Only then can it be decided whether the subject merchandise is a member of that class. E.M. Chemicals v. United States, 20 C.I.T. 382, 388 (Ct. Int’l Trade, 1996). It is the principal use of the class or kind of goods to which the import belongs, and not the principal use of the specific import, that is controlling. Group Italglass U.S.A., Inc., v. United States, 17 C.I.T. 1177 (Ct. Int’l Trade, 1993) (Court granting plaintiff’s motion in limine limiting plaintiff’s burden of proof on the issue of principal use).

The courts have offered guidance when making "class or kind" determinations. Factors that are taken into consideration include: general physical characteristics; expectation of the ultimate purchaser; channels of trade; environment of sale (accompanying accessories, manner of advertisement and display), and; the use, if any, in the same manner as merchandise which defines the class. See Lenox Collections v. United States, 19 C.I.T. 345, 347 (1995); Kraft, Inc. v. United States, 16 C.I.T. 483 (1992); G. Heileman Brewing Co. v. United States, 14 C.I.T. 614 (1990). See also United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F.2d 373 (1976), cert. denied, 429 U.S. 979 (1976). Although none of these factors on their own are determinative, they are probative as to the class or kind of merchandise to which the imported article belongs.

With regard to general physical characteristics, Infineon asserts that the stacked DRAMs have unique physical characteristics which dedicate them to use in ADP memory modules. Infineon distinguishes the DRAMs from other memory products previously classified as being “package stacked” as opposed to “die stacked”, stating that “for the most part” cellular telephone or other entertainment devices use “die stacking” as opposed to “package stacking” technologies. Infineon asserts that the mechanical dimensions of the stacked DRAM are according to a Joint Electronic Device Engineering Council (JEDEC) industry standard. It is asserted that the wafer in the DRAM is designed with circuitry capable of use solely in ADP memory modules. It is asserted by the Infineon electrical engineer, that the foregoing characteristics render the DRAMs in issue “entirely different” from the products used in cellular telephone and mobile applications, and unusable and unsuitable for use in telephone and mobile applications. It is stated that the industry standards make the stacked DRAMs uniquely and solely suitable for use in the manufacture of ADP modules.

Infineon has provided no evidence regarding the wafer circuitry, and how it is distinct from other memory, or even other DRAM. With regard to “package stacking” and “die stacking”, Infineon has described the difference, but has not indicated how one method is distinct from another in use, other than in the specific application for use in the Infineon memory module. There is no evidence that either method is dedicated to a particular use. In fact, research on stacking methods indicates that both are considered for use in other devices. In one article dated July 17, 2003, it was stated that “[h]andset makers from around the world, including the U.S., Europe, Japan and China, are increasingly using both die stacking and package stacking to meet feature and size requirements.” http://www.tessera.com/news/press_releases/2003/pr_2003_07_17.htm. Literature for Amkor Technology, on “Package Stacking” states:

Digital camera and cell phone applications are currently stacking 2 packages for logic + memory architectures. High density DRAM and Flash memory modules are stacking up to 4 packages high, with this capability demonstrated to 8 high stacks.

The JEDEC standard provided, according to which the DRAMs are packaged is titled “Stacked TSOP II package family (2 high)”, and is identified as MO-238. The standard contains the notation “[t]his registered outline has been prepared by the JEDEC JC-11 committee and reflects a product with anticipated usage in the electronics industry, changes are likely to occur.” It is Infineon’s assertion that the JEDEC MO-238 standard is applicable only to DRAM and for use in ADP systems. Nothing on the document or any other document supports that assertion. In addition, research of “TSOP II”, indicates that it refers to “thin small outline package type II”, “is designed for a variety of applications where thin and small memory devices are required,” and that a TSOP II can be a package solution for memory such as EPROM, EEPROM and DRAM. www.spil.com.tw. In addition, it is stated in the description of TSOP II:

Additional devices such as gate drivers, controllers, op-amps, logic and analog also find TSOP II attractive. The package is suitable for end-product applications such as – disc drives, telephone handsets, speed dialers and consumer electronics (video/audio).

We find that this information contradicts the assertions made by Infineon, that the TSOP II standard is only for use in ADP machines. It is our understanding that DRAM, while used in ADP machines, is also used in printers, copiers, scanners and fax machines.

The literature submitted by Infineon, brings into question whether the stacked DRAMs are used by Infineon in memory modules for other products. One brochure, submitted as Exhibit 10, is entitled “Memory Spectrum.” The brochure, on p.2, contains a grid indicating different products. Desktop PC/Workstation, Notebook PC, Server, Network, and Storage articles are said to use DRAM. Mobile articles are said to use Mobile-RAM and Cellular RAM, and “Consumer” articles are said to use Graphics RAM and Consumer RAM. The Consumer article depicted appears to be a video monitor or television set. The brochure includes descriptions of the different types of memory. ADP type memory is “D” for double data rate SDRAM, or stacked DRAM (Exhibit 10, p. 4, and p. 9 of ruling request), cellular type memory is “P” for PSRAM (Exhibit 10, p. 26, and p. 10 of ruling request), and mobile type memory is “L” for Low-power SDRAM and “M” for DDR Mobile-RAM (Exhibit 10, p. 24, p 10 of ruling request). In its submission, Infineon specifically used the example of the “D” type memory as being for ADP. However, according to the brochure, the Consumer articles also show the use of “D” memory. In the description of Consumer DRAM, the “D” memory is also described as “Double Data Rate SDRAM.” The use of the same memory type in a consumer product is either inconsistent with the assertions of Infineon regarding the limited use of stacked DRAM, or the significance of the memory types identified in the product literature.

This is true of another type of memory identified in Exhibit 10, and the ruling request. The ruling request states that “T” memory is also an ADP machine type DRAM. Ruling request, p. 9. The brochure, indicates that “T” memory is DDR2 SDRAM, or “Double Data Rate 2 SDRAM.” Exhibit 10, p. 4. Other publications indicate that DDR2 SDRAM is a “perfect match for todays mobile users.” Http://www.kingston.com/tools/umg05a.asp.

We also note that in HQ 966765, supra, the general physical characteristics of the stacked memory at issue, were determined to be such they would allow the memory to be used in the mobile industry, which included personal digital assistants, camcorders, as well as notebook computers. According to the grid on Exhibit 10, p. 2, notebook computers also use the stacked DRAM at issue, indicating an overlap of the characteristics of the stacked memory in HQ 966765, and the stacked memory which is the subject of the instant ruling. Therefore, the subject stacked DRAM also have the characteristic of being used in the mobile industry.

It was asserted by Infineon’s electrical engineer that he has no knowledge of die-stacked DRAMs in mobile or cellular technology. This contradicts a November 2005, announcement that Samsung has begun mass producing a 512 Mb DRAM for mobile products, with which Samsung can also provide a one gigabyte memory capacity for mobile devices when two of its new 512 Mb DRAMs are stacked together in a dual-die package. www.physorg.com/news8166.html; http://www.samsung.com/Products/Semiconductor/News/DRAM/DRAM_20051110_0000.

As to the specifications for the manufacture of the Infineon memory modules which are manufactured using the stacked DRAMs, while they may in fact require use of the particular stacked DRAM, that evidence does not support that stacked DRAM cannot be used for any other application.

While the specific characteristics of the imported merchandise may be as package stacked memory for memory modules for ADP machines, we would identify the general physical characteristics of the imported merchandise as stacked memory. The evidence does not support that the general physical characteristics of the imported stacked DRAM belongs to a separate class of articles than all other stacked memory. The evidence indicates that package stacked memory and DRAM are used in ADP as well as in other applications.

With regard to expectation of the ultimate purchaser, Infineon asserts that the ultimate purchasers of the memory modules are manufacturers of ADP machines. Infineon has provided evidence, in the form of statements from its customers, that they purchase the memory modules, composed of stacked DRAM, for use in the manufacture of ADP machines. Exhibit 17. Infineon has also provided a product data sheet for a memory module made with stacked DRAM, which, indicates use of the module in ADP machines. Exhibit 16. In this case Infineon is the purchaser of the stacked DRAMs. Other than Infineon, we do not have any information of the purchasers of stacked DRAM. However, based on the general physical characteristics of stacked memory, the ultimate purchasers of stacked memory would expect to purchase memory meeting their specific requirements.

With regard to channels of trade and environment of sale, we do not have any information on the channels of trade of the stacked DRAMs. With regard to the memory modules, Infineon has provided copies of its product literature, which is described above. While different memory module types may be suitable only for use with specific types of articles, all of the different memory types are promoted in one brochure. Therefore the channel of trade, and environment of sale is the same for the modules with the stacked DRAMs as well as the mobile, cellular, and consumer memory module types. This factor does not indicate that the memory modules with the stacked DRAMs are of a separate class or kind than other memory modules. Infineon asserts that the channels of trade for the stacked DRAMs is manufacturers of ADP machines. We would disagree with the assertion, as the facts provided do not indicate that Infineon is a manufacturer of ADP machines. As seen from Exhibit 10, Infineon sells many different types of memory products. On environment of sale, Infineon asserts that the stacked DRAMs are purchased and imported by Infineon as subassemblies of the memory module. On Infineon’s website, it is stated that Infineon’s mission includes the customer focus of delivering innovative semiconductor solutions. www.Infineon.com. The channels of trade, and environment of sale for the stacked DRAMs, appear to be semiconductor providers and providers of memory products, such as Infineon, as opposed to ADP machine manufacturers.

With regard to usage of the merchandise, we are instructed to consider the use of the merchandise, if any, in the same manner as merchandise which defines the class. While the specific stacked DRAMs in issue may be solely used in ADP machines, stacked memory in general has a very broad use, over many products, and is not principally or solely used in ADP machines. Moreover, based on Exhibit 10, and the discussion regarding the use of “D” type memory in consumer products, it is questionable in fact whether the imported stacked DRAMs can only be used in ADP machines. While the actual use of the merchandise is not dispositive of the principal use of the class or kind to which the merchandise belongs, it is important evidence both in determining the class or kind to which the imported product belongs and in determining principal use. See Carborundum, supra.

We find that the evidence presented by Infineon falls short of demonstrating that the imported stacked DRAMs belong to the class or kind of goods suitable for use solely or principally with ADP machines. This is due to the fact that the physical characteristics of the merchandise are the same as for other stacked memory not suitable for use solely or principally with ADP machines. The other factors do not provide a sufficient basis for establishing that the imported stacked DRAMs are in a separate class or kind of merchandise than other stacked memory. Finally, there is some doubt about the actual use of the subject merchandise. Therefore, CBP cannot determine that the imported stacked DRAMs are of a class or kind of article suitable for use solely or principally with ADP machines. As the subject stacked DRAMs do not meet the terms of heading 8473, HTSUS, classification under that heading is precluded.

Based on the information presented, we find that the imported package stacked DRAMs are classifiable under heading 8543, HTSUS, specifically in subheading 8543.89.96, HTSUS, as “[e]lectrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: Other: Other: Other: Other: Other.”

HOLDING:

By application of GRI 1, the package stacked DRAMs are classified in heading 8543, HTSUS, specifically subheading 8543.89.9695, HTSUSA, which provides for: “[e]lectrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: Other: Other: Other: OtherOther” with a column one, general duty rate of 2.6% ad valorem. 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 on the internet at www.usits.gov/tata/hts/.

Sincerely,


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