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HQ 965098




December 11, 2001

CLA-2 RR:CR:GC 965098 GOB

CATEGORY: CLASSIFICATION

TARIFF NO.: 8534.00.00

Ms. Sharon M. Burns
Customs Specialist
AVX Kyocera
2875 Highway 501
Conway, SC 29526

RE: Revocation of NY D87688; “Z” chip

Dear Ms. Burns:

This is in response to your letter of May 22, 2001, in which you request reconsideration of NY D87688, issued to you on February 25, 1999, by the Director, Customs National Commodity Specialist Division, New York, regarding the classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of a ceramic substrate that contains capacitors and resistors. We have reviewed the classification set forth in NY D87688 and have determined that it is incorrect. This ruling sets forth the correct classification.

Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed revocation of NY D87688, as described below, was published in the Customs Bulletin on October 31, 2001. No comments were received in response to the notice.

FACTS:

In D87688, the “Z” chip was described as follows: “. . . a capacitor/resistor device which has both the capacitor and resistor devices co-fired into the same package. It is designed to function as an impedance matching device.”

In your letter of May 22, 2001, you state in pertinent part as follows:

This component is a capacitor and resistor on a ceramic base, as both components are passive, we believe that the correct classification should be 8534.0000 . . . The capacitor/resistor is manufactured using a printing process similar to the process used for multilayer ceramic capacitors. The Z chip is a fully integrated RC made with a stack of multiple, closely spaced resistor elements arranged in a multilayer capacitor structure.

Your Internet site provides the following general description of the “Z” chip:

To meet the needs of today’s high speed circuits and reduced power requirements, AVX has developed the “Z” Chip. This impedance matching component, available in a standard 0603 package, breaks the barrier of component density by providing a truly integrated series resistor-capacitor design.

The ”Z” Chip enables a board designer to achieve maximum signal integrity by eliminating reflections and reducing DC power consumption.

Another Internet site describes the “Z” chip as follows:

. . . a discrete impedance matching series resistor-capacitor (RC) chip. This device contains the resistor within the chip, and it is one of the few RC chips in an 0603 size. Designed to meet the needs of today’s high-speed, high-power efficient circuits, the chip is suited for line termination applications in products such as laptops and hand-held devices.

The same Internet site quotes a product manager who states as follows:

While the resistor alone is still the prevalent method for matching impedance, the biggest problem with this method is that when the signal line is high, you are drawing continuous DC current. With the “Z” Chip, you get the impedance matching properties of a resistor, but you also get the high DC resistance of the capacitor. The advantage is reduced power consumption and board space savings provided by a volumetrically efficient component.

In NY D87688, Customs determined the “Z” chip to be classified in subheading 8543.89.96, HTSUS, as: “Electrical machines or apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: ... Other machines and apparatus: ... Other: ... Other: ... Other: ... Other.”

ISSUE:

What is the classification under the HTSUS of the “Z” chip?

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI’s”). GRI 1 provides that the classification of goods shall 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 GRI’s may then be applied.

The Harmonized Commodity Description and Coding System Explanatory Notes (“EN’s”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the EN’s provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80.

The HTSUS provisions under consideration are as follows:

8534.00.00 Printed circuits

8543 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof:

Other machines and apparatus:

8543.89 Other:

Other:

Other:

8543.89.96 Other.

Note 4 to Chapter 85, HTSUS, provides in pertinent part as follows:

For the purposes of heading 8534 "printed circuits" are circuits obtained by forming on an insulating base, by any printing process (for example, embossing, plating-up, etching) or by the "film circuit" technique, conductor elements, contacts or other printed components (for example, inductances, resistors, capacitors) alone or interconnected according to a pre-established pattern, other than elements which can produce, rectify, modulate or amplify an electrical signal (for example, semiconductor elements).

The term "printed circuits" does not cover circuits combined with elements other than those obtained during the printing process, nor does it cover individual, discrete resistors, capacitors or inductances. Printed circuits may, however, be fitted with non-printed connecting elements. [All emphasis in original.]

Information submitted by you (an abstract entitled Multilayer Cofired RC’s for Line Termination by Ritter, Templeton, and Smith of the AVX Advanced Product and Technology Center) describes the “Z” chip in pertinent part as follows:

Cofirable material systems are comprised of dielectrics, resistors and conductors that are optimized to densify at similar firing temperatures with nearly matched shrinkage. These material systems allow the design of multilayer devices wherein the capacitor and resistor elements are fully integrated in the structure of the device. Unlike ceramic chip-carrier packages with single layer buried resistors interconnected with buried metallic conductors – currently the most common usage of these cofirable material systems – the fully integrated RC is made with a stack of multiple, closely spaced resistor elements arranged in a multilayer capacitor structure. [Diagram omitted.]

The device resistance comes from the parallel resistance of the individual layers, and the device capacitance arises from capacitance coupling of the planar resistor elements that are terminated in the multilayer capacitor structure. In this structure, the resistor layers themselves form the electrodes of a parallel plate capacitor. We have coined the term Z Chip™ for this device to denote its application for impedance matching. Although the construction of this cofired RC is simple, the device is electrically complex because the capacitance and resistance are physically distributed throughout the entire device.

After a careful consideration of this issue, we find that the “Z” chip meets the definition of printed circuit in Note 4 to Chapter 85, HTSUS. The capacitors and resistors are passive components that were formed on an insulating base by a printing process. Accordingly, the “Z” chips are classified in subheading 8534.00.00, HTSUS, as: “Printed circuits.”

This determination is consistent with our determination in HQ 089376 dated September 11, 1991, where we classified a resistor network in subheading 8534.00.00, HTSUS. The resistor network was described as: “. . . a ceramic circuit substrate with printed conductors and resistors that forms a network which was applied by a printing process.”

HOLDING:

The “Z” chips are classified in subheading 8534.00.00, HTSUS, as: “Printed circuits.”

EFFECT ON OTHER RULINGS:

NY D87688 is revoked. In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.

Sincerely,

John Durant, Director
Commercial Rulings Division

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