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NY M82158

April 27, 2006

MAR-2 RR:NC:1:109 M82158


Mr. Michael Byrnes
Sr. Staff Logistics Planner
4509 Freidlich Lane
Building 2
Austin, TX 78744-1812


Dear Mr. Byrnes:

This is in response to your letter dated April 7, 2006 requesting a ruling on the acceptable country of origin marking for outer box cartons in which integrated circuits are imported into the United States. A marked sample of the outer box cartons was not submitted with your letter for review. However, samples of your various integrated circuits were submitted revealing that each of the individual integrated circuits is marked with their country of origin.

According to your letter, you acquire semiconductor wafers overseas and fabricate them into individual integrated circuits in various foreign countries (i.e. Malaysia, Taiwan, and China). You provided the following detailed explanation of the assembly process, in which the semiconductor wafers are sorted, tested, and assembled into individual integrated circuit packages (housings).

1 – The semiconductor wafers are sorted or tested to determine the good die from the bad die.

2 - The good dies are removed from the wafer and attached to a lead frame (die attach).

3 - Wire Bonding takes place where the appropriate pins on the die are connected to the corresponding lead on the lead frame via gold wires.

4 - Packaging or Encapsulation of the die takes place in which a mold compound is formed around the die that is attached to the lead frame with all the wire bonding of the die pins to the appropriate lead on the lead frame. This Packaging or Encapsulation process encapsulates the die into a package and only allows the ends of the leads to be exposed. The actual die at this point has been encapsulated into an integrated circuit, without the marking information on it. The country of origin may also be stamped into the mold compound depending on the processes needed for a given integrated circuit.

5 - Cleaning, trimming, and bending of the exposed leads that protrude out of the integrated circuit occurs to the appropriate specs for the integrated circuit being built.

6 - The integrated circuits are then marked or identified with the company logo information, part number, date and trace code information, and the country of origin in which the assembly process took place.

7 - The finished integrated circuits undergo testing to confirm that each functions according to specifications.

8 - The integrated circuits are dry baked in an oven to insure that there is no moisture in the integrated circuits, which could cause the integrated circuits to malfunction or not function at all.

9 - The integrated circuits are packed into the appropriate packing type needed, i.e. tape and reel, tube or tray packing. They are then placed in moisture barrier bags with desiccant and humidity indicator cards to protect them from exposure to moisture.

10 – A given number of integrated circuits are placed in boxes. (Your letter refers to them as inner boxes). These inner boxes are affixed with a label identifying the country of origin as that in which the assembly process took place.

11 - The inner boxes are then packed into outer cartons for shipment to the United States.

 It is noted that in C.S.D. 80-227, dated February 13, 1980, and in Headquarters Ruling Letter (HRL) 732357, dated May 21, 1990, Customs found that the assembly of integrated circuit (semiconductor) wafers into integrated circuit packages result in a substantial transformation. The finished integrated circuits are considered to be a product of the country in which such processing occurs. Based upon the above, the integrated circuits in question are a product of the foreign country in which they are assembled, i.e. Malaysia, Taiwan, China.

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 United States 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.

As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain.

With regard to the permanency of a marking, section 134.41(a), Customs Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable.

As you stated in your letter the merchandise being imported into the United States are new integrated circuits packed in small inner boxes, both bearing the country of origin, that being the name of the foreign country in which the assembly took place. You further stated that they are ready for commercial sale to Legerity’s customers without further processing after importation. Therefore, the country of origin, which appears on each of the individual integrated circuits upon importation, as well as the country of origin on the inner boxes, will remain legible, indelible, and permanent.

At the time of importation, each of the integrated circuits is marked legibly, indelibly and permanently, in English, with their country of origin, the foreign country in which the assembly took place, and packed into inner boxes that also have a permanent label affixed to them identifying the country of origin of the integrated circuits. Therefore, upon importation, the individual integrated circuits and inner boxes satisfy the marking statute. The marking statute requires that the outer box cartons also be marked with the country of origin of its contents. Since the assembly process undertaken overseas results in a substantial transformation, the outer box cartons are to be conspicuously, legibly and permanently marked to indicate the foreign country in which the assembly process occurred. Therefore, the acceptable country of origin marking for the outer box cartons should read “Country of Origin Malaysia”, “Country of Origin Taiwan”, or “Country of Origin China, as applicable.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 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 Linda M. Hackett at 646-733-3015.


Robert B. Swierupski

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