The country of origin of a Discrete Power Transistor and a Transistor Power Module

N343494 November 14, 2024 OT:RR:NC:N2:209 CATEGORY: Origin Melissa Duffy Fenwick & West, LLP 733 10th Street NW, Suite 400Washington, DC 20001 RE:  The country of origin of a Discrete Power Transistor and a Transistor Power Module Dear Ms. Duffy: In your letter dated October 23, 2024, you requested a country of origin ruling on discrete power transistors and transistor power modules on behalf of your client Wolfspeed, Inc. The items concerned are two transistor products referred to as: Discrete Power Transistor and Transistor Power Module. These items are silicon-carbide (“SiC”) based transistor products used in power systems, such as motor drives and AC/DC power supplies. The product packaging is what differentiates the discrete power transistors from the transistor power module. The discrete power transistor consists of a single packaged transistor, whereas the transistor power module consists of multiple such transistors packaged together. The Discrete Power Transistor and Transistor Power Module share the same manufacturing process. That process is divided into two basic phases: (1) the front-end manufacturing process, which occurs in the United States and Malaysia; and (2) the back-end manufacturing process, which occurs in Malaysia and China. The front-end manufacturing process determines all of the inherent electrical performance parameters of the products. At the end of the front-end manufacturing process, the transistor dice are complete, having their essential character and full operational capability. The transistor dice then undergo packaging through Wolfspeed’s back-end manufacturing process, to be sold in Discrete Power Transistor and Transistor Power Module formats. The front-end manufacturing process comprises eleven steps, undertaken primarily in the United States with one step in Malaysia. The process begins with a raw SiC substrate that is grown at Wolfspeed’s facilities in the United States. The substrate then undergoes multiple chemical and photolithographic processing steps creating numerous transistor dies on the wafer. The front-end processing that takes place in the United States and Malaysia is as follows: (1) Chemical mechanical polishing (United States) (2) Epitaxy (United States) (3) Ion implantation (United States) (4) Thermal processing (United States) (5) Layer deposition (United States) (6) Lithography (United States) (7) Etching (United States) (8) Resist removal and cleaning (United States) (9) Metrology (United States) (10) Thinning (United States) (11) Testing (Malaysia) – During the back-end process, Wolfspeed’s wafers, each containing numerous finished transistors printed in rows across the surface, are diced, assembled, and packaged. These steps do not alter the inherent electric properties, character, or use of the individual transistors. Rather, the packaging functions as the mechanical carrier of a bare transistor die, protecting it from environmental effects and permitting connection to a printed circuit board.  The back-end processing That takes place in Malaysia and China, is as follows: (1) Sawing wafers (Malaysia) (2) Attaching die to lead frame (China) (3) Re-flow soldering (China) (4) Wire bonding (China) (5) Molding (China) (6) Testing (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 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." The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character or use, different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff'd, 989 F.2d 1201 (Fed. Cir. 1993). Based upon the facts presented, it is the opinion of this office that the front-end processing that takes place within the United States is both meaningful and complex, resulting in the creation of wafers which incorporate numerous finished transistors. All non-originating materials/elements used in the manufacture of the wafers/transistors substantially transformed as a result of the United States manufacturing process. The character of both products (Discrete Power Transistor and Transistor Power Module) is imparted by the transistors which would be considered the dominant component of each assembly. The transistors do not undergo a substantial transformation as a result of the testing conducted as the final front-end step within Malaysia or the back-end manufacturing process that takes place in Malaysia and China. The transistor die retain their identity and predetermined end use. Therefore, since a substantial transformation does not occur as a result of the testing conducted as the final front-end step within Malaysia or the back-end processing that takes place within Malaysia and China, the country of origin of the finished Discrete Power Transistor and Transistor Power Module will be the United States for marking purposes at time of importation into the United States. It should be noted that when the country of origin is the United States, products would not be required to have any country of origin marking pursuant to 19 U.S.C. 1304 when imported into the United States. Whether an article may be marked with the phrase “Made in the USA” or similar words denoting United States origin, is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you contact the FTC Division of Enforcement, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580 on the propriety of proposed markings indicating that an article is made in the U.S. The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP. This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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, please contact National Import Specialist Steven Pollichino at steven.pollichino@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division