Field programmable gate array (FPGA) configuration device; multichip; internal advice

HQ H016581 May 4, 2010 CLA-2:OT:RR:CTF:TCM H016581 TNA CATEGORY: Classification TARIFF NO: 8543.89.96 Port Director U.S. Customs and Border Protection 555 Battery St., Room 319 San Francisco, CA 94111 Attn: SIS, Lori Becquet Re: Field programmable gate array (FPGA) configuration device; multichip; internal advice Dear Port Director: This is in response to the letter dated July 23, 2007 submitted to this office on behalf of Altera Corporation (Altera), regarding the classification of field programmable gate array (FPGA) configuration devices, entered prior to April 1, 2006, under the Harmonized Tariff Schedule of the United States (HTSUS). As the inquiry did not pertain to a prospective transaction, this office is treating it as an internal advice under Customs Regulations 177.11 (19 CFR 177.11), following communication with your office. FACTS: This internal advice request pertains to Enhanced Configuration Devices (EC devices) entered prior to April 1, 2006. The items concerned are Enhanced Configuration Devices, models EPC4, EPC8 and EPC16. Each device consists of two integrated circuits: a standard flash memory and a controller in die form. The two integrated circuits are mounted on an insulating substrate (PCB) made of Bismaleimide Triazine. The purpose of these devices is to provide on-board startup configuration and in-system programmability to Altera’s own line of Field Programmable Gate Array processors (FPGA). During device operation, the FPGA stores configuration data in SRAM cells. SRAM memory is volatile and must be loaded with configuration data each time the device powers up. The subject devices are responsible for providing that configured data to the FPGA’s processor. Both Altera and your office now requesting the proper classification for the EC devices entered prior to April 1, 2006. Altera proposes that the EC devices entered prior to April 1, 2006 are not classified in heading 8543, HTSUS, but as parts of the FPGA devices under subheading 8542.21.80, HTSUS. ISSUE: Whether the devices entered prior to April 1, 2006, are classified in heading 8542, HTSUS, as parts of the FPGA devices, or under heading 8543, HTSUS, as “[e]lectrical machines and apparatus, having individual functions”. 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 2006 HTSUS provisions under consideration are as follows: 8542 Electronic integrated circuits and microassemblies; parts thereof: Monolithic integrated circuits: 8542.21 Digital: 8542.21.80 Other 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: 8543.89.96 Other Legal Note 2 to Section XVI, HTSUS (2006), reads, in pertinent part: Subject to note 1 to this section, note 1 to chapter 84 and to note 1 to chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules: (a) Parts which are goods included in any of the headings of chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings; (b) 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 (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind… as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517. Legal Note 5(b) to Chapter 85, HTSUS (2006), reads, in pertinent part: For the purposes of headings 8541 and 8542:… (b) “Electronic integrated circuits and microassemblies” are: (i) Monolithic integrated circuits in which the circuit elements (diodes, transistors, resistors, capacitors, interconnections, etc.) are created in the mass (essentially) and on the surface of a semiconductor material (doped silicon, for example) and are inseparably associated; The Harmonized Commodity Description and Coding System Explanatory Notes (EN’s) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the EN’s provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the system. CBP believes the EN’s should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989). The EN to heading 8542, HTSUS, reads, in pertinent part, the following: Except for the combinations (to all intents and purposes indivisible) referred to in Part (I), subparagraph (2) above concerning hybrid integrated circuits, the heading also excludes assemblies formed by mounting one or more discrete components on a support formed, for example, by a printed circuit and assemblies formed by adding to an electronic microcircuit either one or more other microcircuits of the same or of different types or one or more other devices, such as diodes, transformers, resistors:  * * * * * * * * * Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), parts of the goods of this heading are classified here. The EN to heading 8543, HTSUS, reads, in pertinent part, the following: This heading covers all electrical appliances and apparatus, not falling in any other heading of this Chapter, nor covered more specifically by a heading of any other Chapter of the Nomenclature, nor excluded by the operation of a Legal Note to Section XVI or to this Chapter…. The electrical appliances and apparatus of this heading must have individual functions. The introductory provisions of Explanatory Note to heading 84.79 concerning machines and mechanical appliances having individual functions apply, mutatis mutandis, to the appliances and apparatus of this heading… Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), parts of the goods of this heading are also classified here. Altera argues that the subject FPGA configurators are properly classified as parts of Altera’s FPGA devices, which themselves are monolithic integrated circuits within the scope and meaning of Legal Note 5(b)(i) to Chapter 85, HTSUS. In support of this argument, Altera states that its configuration devices are designed only to work with Altera FPGAs, which cannot operate unless they receive the boot configuration data stored in the configuration device’s memory. Furthermore, Altera states, its configuration devices have no other purpose or function than this configuration. As a result, Altera argues that in accordance with Note 2(b) to Section XVI, HTSUS, the subject merchandise is classified in subheading 8542.21.80, HTSUS, as parts of electronic integrated assemblies, and parts of monolithic integrated circuits in particular. 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. See 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 headings 8484, 8544, 8545, 8546 or 8547) are in all cases to be classified in their respective headings.” As such, if the EC devices are classified in heading 8543, HTSUS, then they are excluded from classification in heading 8542, HTSUS, as parts of integrated circuits by application of Note 5(a) to Section XVI. Notwithstanding the fact that the stacked chips may be principally if not solely used as parts of Altera’s FPGA devices, they are goods included in 8543. Heading 8543 covers electrical machines and apparatus, having individual functions, not specified or included elsewhere in chapter 85, and parts thereof. The subject EC devices provide flash and SRAM memory. Their purpose is to combine the benefits of non-volatile data block storage of the flash memory chip, with the accelerated access to stored data, provided by the SRAM. Thus, they have an individual function, specifically provided for in this heading. They are not covered more specifically by a heading of any other chapter of the Nomenclature, nor excluded by the Legal Notes to Section XVI, or Chapter 85. See HQ 968021 March 3, 2006; HQ 961097, dated May 11, 1998. In this case, we do not reach Note 2(b), because we have determined that EC devices are goods included in heading 8543, HTSUS. Accord, HQ 968021; 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. As a result, the subject merchandise, as imported before April 1, 2006, is properly classified in subheading 8543.89.96, as “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: other: other: other.” HOLDING: By application of GRI 1 and Note 2(a) to Section XVI, Altera’s Enhanced Configuration Devices are classified under heading 8543, HTSUS. They are specifically provided for under subheading 8543.89.96, as “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: other: other: other.” The 2006 column one, general duty rate was 2.6%. You are to mail this decision to the internal advice requester no later than 60 days from the date of the decision. At that time, the Office of International Trade, Regulations and Rulings, will make the decision available to CBP personnel and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division