The country of origin and marking of integrated circuits from India

N302681 February 21, 2019 MAR-2-85:OT:RR:NC:N2:209 CATEGORY: Marking, Country of Origin Justin K. Smith Micron Technology Inc. 8000 S. Federal Way Boise, ID 83716 RE: The country of origin and marking of integrated circuits from India Dear Mr. Smith: In your letter dated January 29, 2019, you requested a country of origin marking ruling. The items concerned are integrated circuits which will undergo the “Integrated Circuit Reball Process”. The “Integrated Circuit Reball Process”, to be referred to in this ruling as “Depop Reball”, is a process of integrated circuit harvesting and processing from completed printed circuit board (PCB) assemblies. Completed memory modules or solid state digital drives (SSDs), which have failed to meet top tier testing standards, are shipped to subcontractors for disassembly and further processing. This further processing involves removing integrated circuits from the memory modules or SSDs and transforming them through a manufacturing process. Micron assembles memory modules and SSDs at multiple offshore manufacturing locations using integrated circuits (ICs) in the form of dram and flash memory, controllers, PCBs, and other components. Once completed the memory modules and SSDs undergo rigorous testing to ensure they function properly and conform to company standards. Those devices which do not meet specifications are referred to as “test fallout.” In the example presented, SSDs, products of Singapore and the United States, were shipped to India to undergo the Depop Reball process. These SSDs contain flash memory ICs, which are products of Malaysia or Singapore. The test fallout devices are shipped to Boise, ID, for examination before being shipped to India to undergo the Depop Reball process. Once the SSDs are received at the subcontractor in India they will undergo a complex harvesting and manufacturing process. First, all cases, covers, labels, and stickers are removed from the SSDs. The SSDs are washed through a high-pressure wash system to remove all residue. After being washed the devices are placed in a low temperature controlled oven, which bakes out any moisture that remains. The SSDs are then loaded into aluminum carriers which are transported through a conventional semiconductor reflow oven. The reflow oven heats the dram or flash components until the solder is molten. While hot, the SSDs enter an automated pick and place system which removes the ball grid array (BGA) or land grid array (LGA) components from the printed circuit board and places them in JEDEC trays (IC trays). The BGA and LGA components are then processed thru a system for solder pad preparation. This system removes the solder, leaving a near virgin pad which will accept a new solder ball in the next step of the assembly process. Flux and solder spheres are attached to the BGA/LGA components. Components then move through another oven to reflow the solder spheres to the integrated circuit. The components are washed in a controlled high-pressure wash system after the reflow process to remove any remaining flux. The components are then processed through a scan and inspection system to confirm that the integrated circuit package quality meets specifications. 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 U.S. 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. The “country of origin” is defined in 19 CFR 134.1(b) as “the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the 'country of origin' within the meaning of this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.” For tariff purposes, the courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982). However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987). Based upon the facts presented and the pertinent authorities, it is the opinion of this office that the integrated circuits, which are removed from the memory module or SSD for repair do not undergo a change in character or use as a result of such disassembly, but retain their identity as integrated circuits and/or parts of the memory or SSD modules. Therefore, since these items do not undergo a substantial transformation as a result of the disassembly, the country of origin remains the country where the integrated circuits were produced (Malaysia or Singapore) and they must be marked accordingly at time of importation into the United States. 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 Steven Pollichino at steven.pollichino@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division