The country of origin and marking of a transistor

N324983 April 6, 2022 MAR-2-85:OT:RR:NC:N2:209 CATEGORY: Marking, Country of Origin Maher Shomali Thomsen and Burke LLP 2 Hamill Rd Baltimore, MD 21210 RE: The country of origin and marking of a transistor Dear Mr. Shomali: In your letter dated March 23, 2022, you requested a country of origin and marking ruling on behalf of your client, onsemi. The items concerned are silicon carbide metal-oxide semiconductor transistors. They consist of two silicon carbide metal-oxide semiconductor transistors encapsulated in a plastic-metallic package. Each transistor is 4.38 x 4.335 mm in dimension and has a thickness of 100 micrometers. This request relates to a prospective importation of the silicon carbide metal-oxide semiconductor transistors from China. The production process of the transistors is comprised of three stages, i.e., the substrate construction, the front-end operations, and the back-end operations. Substrate Construction: The substrate manufacturing may take place in various countries (i.e. United States, Germany, Japan, China, or South Korea). The substrate construction process involves seven distinct steps starting with procuring high quality silicon carbide powder and ending with the creation of silicon carbide substrates, also known as empty wafers. Front-end operations: The empty wafers are shipped to onsemi South Korea, where the front-end operations occur. The operations consist of six steps of processing which includes, inspection of silicon carbide substrates, epitaxial growth, visual inspection, marking, fabrication of all electrical elements/microcircuits and EWS (an electrical test). Once this fabrication process is completed, the wafers contain fully functional silicon carbide metal-oxide-semiconductors, or dice. Back-end operations: Lastly, the back-end operations occur in China, where onsemi China singularizes the transistors by dicing and encapsulating the transistors into the plastic package that makes the finished product. Within China, they singulate each transistor die (plural, “dice”) using general purpose wafer sawing equipment. During this process, the transistors that are deemed sub-optimal during testing are removed and discarded. After dicing, onsemi China attaches two dice together in parallel to a direct bonded copper base with aluminum wires using standard ultrasonic welding. The dice are connected to external pins using a copper clip. The pins are used to connect the transistors when used in their intended product. onsemi China encapsulates the die, base and a portion of external pins using generic epoxy molding compound. Finally, onsemi China tests the finished product to electrically verify the functionality of the transistors was not impacted by the packaging process. A complete manufacturing process description and explanation has been provided. 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.” 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, it is the opinion of this office that the front-end manufacturing processes that take place within South Korea impart the essence to the transistors. The wafers, (which contain the die incorporating the complete transistor circuitry) manufactured within South Korea do not undergo a substantial transformation as a result of the manufacturing process that takes place in China. They retain their identity as transistors with a predetermined end use. Therefore, since a substantial transformation does not occur as a result of the Chinese manufacturing/assembly process, the country of origin for marking purposes would be South Korea at the time of importation into the United States. The silicon carbide metal-oxide semiconductor transistors should be legibly, conspicuously, and permanently marked in accordance with the requirements of 19 U.S.C. 1304 to indicate that its country of origin is South Korea. Additionally, as the country of origin has been determined to be South Korea, the silicon carbide metal-oxide semiconductor transistors would not be subject to the Section 301 trade remedies. 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