Hynix Semiconductor Inc, the world's second-largest memory-chip maker, was unfairly penalized by EU tariffs, the WTO ruled, sources said.
The global trade body upheld a complaint by South Korea against the EU's levy on computer memory chips, according to the sources, who declined to be identified. The 25-nation bloc failed to prove Hynix received an illegal state subsidy when Korean banks gave it loan guarantees, the sources said.
The decision, which mirrors last month's ruling against punitive levies implemented by the US, paves the way for the chipmaker to operate its domestic plants at capacity and sell directly to Europe. Hynix avoided the levies by diverting production to the US.
"This helps the company focus on strategy and find more freedom in its planning," said Kim Kyeong-seob at KB Investment Trust Management Co in Seoul. "It looks like Hynix is no longer going to be held back by these tariff issues."
The EU "acted inconsistently" with WTO regulations "in determining that 2001 restructuring constitutes a financial contribution," the ruling says.
The EU will have 30 days to respond to the confidential interim ruling, after which the trade body will issue a final report, which is due in the next few months.
Either side can then appeal.
The US and the EU accused South Korea of illegally bailing out Hynix through government-backed financial restructuring packages.
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