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NY C89860

July 31, 1998

CLA-2-85:RR:NC:MM:109 C89860


TARIFF NO.: 8542.13.8096, 9802.00.8065

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.


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