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Fairchild Semiconductor International Mountain Top, Pennsylvania; Notice of Revised Determination on Remand

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Information about this document as published in the Federal Register.

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Start Preamble

On April 18, 2008, the U.S. Court of International Trade (USCIT) remanded to the Department of Labor (Department) for further investigation the matter Former Employees of Fairchild Semiconductor Corporation v. United States Secretary of Labor, Court No. 06-00215.

In the January 11, 2006 petition for Trade Adjustment Assistance (TAA) and Alternative Trade Adjustment Assistance (ATAA), an official of Fairchild Semiconductor International (the subject firm) alleged that production of “discrete semiconductor devices” at Fairchild Semiconductor International, Mountain Top, Pennsylvania (the subject facility) “deteriorated because of a transfer of production” abroad and that its customers are “purchasing similar devices from other suppliers with locations in foreign countries.” AR 3-4.

The initial investigation revealed that semiconductor wafers were produced at the subject facility during the relevant period, AR 27-28, 30, 42, that the subject facility shifted semiconductor wafer production to China, AR 27-28, and that the subject facility did not import semiconductor wafers after the shift. AR 7, 27, 59.

On February 28, 2006, the Department issued a negative determination regarding workers' eligibility to apply for TAA and ATAA for those workers of the subject facility. AR 41. The Department's Notice of determination was published in the Federal Register Start Printed Page 44286on March 24, 2006 (71 FR 14954). AR 55.

By application dated March 20, 2006, the petitioner requested administrative reconsideration of the Department's negative determination. The request for reconsideration stated that the subject facility produces “semiconductor wafer chips” and that semiconductor wafer chips are like or directly competitive with discrete semiconductor devices. AR 57.

By letter dated April 26, 2006, the Department dismissed the request for reconsideration, stating that discrete semiconductor devices are not like or directly competitive with semiconductor wafer chips and that the subject facility was not directly impacted by increased imports of semiconductor wafers. AR 60. The Department's Dismissal of the Application for Reconsideration was issued on May 1, 2006. AR 63. The Department's Notice of dismissal was published in the Federal Register on May 10, 2006 (71 FR 27292). AR 64.

In a letter filed with the USCIT on June 21, 2006, the Plaintiff sought judicial review. In the complaint, the Plaintiff alleged that the subject workers should be certified based on a shift of production followed by increased imports of articles, and that the workers should be certified because they are similarly situated as the workers covered by TA-W-53,335. The Department agreed to a remand to discuss this issue.

On remand, the Department determined that the subject workers produced semiconductor wafers and that increased imports of finished semiconductor devices cannot be the basis for certification of a petition applicable to workers engaged in the production of semiconductor wafers. In the determination, the Department stated that the denial was appropriate because the two articles are neither like nor directly competitive with each other. The Department issued a negative determination on remand on April 27, 2007. The Department's Notice of determination was published in the Federal Register on May 3, 2007 (72 FR 24613).

In its April 18, 2008 opinion, the USCIT stated that the Department's identification of the article at issue was confusing based on the record before the court, and, therefore, the Department's determination was not “supported by substantial evidence.” The USCIT thereupon remanded the case to the Department for further investigation as to whether there were increased imports during the relevant period of articles like or directly competitive with semiconductor wafers produced by the subject workers following the shift of production to a foreign country.

To address the USCIT's concerns in its April 18, 2008 order, the Department made efforts to better understand this industry and the operations of the subject facility during the second remand investigation. These efforts include further investigation of actual plant operations, SAR 22, 28-35, and researching the semiconductor wafer production process and the semiconductor chip production process. SAR 5-21, 39-42.

To clarify its findings in the second remand investigation, the Department sets forth the following terms and definitions:

  • “Wafer” means the thinly sliced and polished disc, usually 4-8 inches in diameter and made of silicon, upon which semiconductor chips are made;
  • “Semiconductor chip” (also referred to as a “chip”) means the multiple layers of circuitry that are stacked on a wafer, with the wafer as the base layer;
  • “Semiconductor wafer” means a wafer that has stacked on it hundreds or thousands of semiconductor chips (depending on the surface area of the wafer and the dimensions of each chip);
  • “Die” means a semiconductor chip that is separated from the wafer upon which it was created; and
  • “Semiconductor device” (also referred to as an integrated circuit) means that the die has been mounted on a lead-wire harness and packaged (the die in the harness is encapsulated, usually in plastic).

Based on the January 11, 2006 petition date, the relevant period for purposes of determining TAA eligibility in the case at hand is January 2005 through December 2005, and the article produced by the subject firm during January 2005 through December 2005 is the focus of the TAA investigation.

As part of its efforts to accurately identify the article produced at the Fairchild, Mountain Top, Pennsylvania facility during the relevant period, the Department received information from the company official who filed the petition (a senior human resources associate), SAR 22, the human resources manager of Fairchild, Mountain Top, Pennsylvania, SAR 22, Fairchild legal counsel, SAR 31, 34, 39 and the managing director of all operations at Fairchild, Mountain Top, Pennsylvania. SAR 34.

According to the senior human resources associate, the subject facility produced semiconductor chips in 8-inch wafer form. The senior human resources associate further stated that he believes that the subject facility produced semiconductor wafers and semiconductor chips because each chip on the wafer is fully functional as designed. This individual also stated that semiconductor wafers produced at the subject facility are sent to Asia. SAR 22.

According to the human resources manager of Fairchild, Mountain Top, Pennsylvania, the subject facility produced 8-inch semiconductor wafers bearing semiconductor chips. The human resources manager further stated that because the wafer becomes part of the semiconductor chip, the terms semiconductor wafers and semiconductor chip are interchangeable. This official also stated that the subject facility only produced semiconductor wafers and not semiconductor devices as the semiconductor wafers are sent to Asia to be cut into die and packaged. SAR 22.

In efforts to reconcile the seemingly contradictory statements by the senior human resources associate and the human resources manager, the Department contacted Fairchild's legal counsel for clarification. SAR 23-33. Fairchild legal counsel sent the Department a link to an Internet site that describes the article produced at the subject facility. SAR 39. Legal counsel also requested that the managing director of operations at Fairchild, Mountain Top, Pennsylvania, identify what activities took place at the subject firm during the relevant period. SAR 34. This individual was directly involved in the manufacturing of these products and has the most experience and expertise in the actual production line and the products manufactured. SAR 34.

According to the managing director, only steps 8, 9, and 10 as described in the pamphlet “HOW TO MAKE AN INTEGRATED CIRCUIT: A step-by-step guide for the serious do-it-yourselfer” were done at the subject facility during the relevant period. SAR 34, 37-38. As found in the second remand investigation, the process at the subject facility starts with a “wafer” as above defined.

At the end of this process (steps 8-10 of the “HOW TO MAKE AN INTEGRATED CIRCUIT” pamphlet), SAR 37-38, the subject facility has produced a “semiconductor wafer” which may contain hundreds or thousands of individual “chips” as indicated by the managing director. SAR 34, 37-38. Because the managing director is fully knowledgeable about the activities that took place at the subject facility during the relevant period and about the semiconductor production process, during this remand Start Printed Page 44287investigation, the Department relied on facts provided by the managing director in determining that, during the relevant period, the subject facility produced semiconductor wafers.

The Department also considered in the second remand investigation whether that shift of production could provide a basis for certification of the petitioning workers even though the subject facility did not import semiconductor wafers after that production shift.

In order for a group of workers to meet the certification requirements under Section 222(a)(1) and Section 222(a)(2)(B) of the Trade Act of 1974, as amended, the Department must determine that the following was satisfied:

A. A significant number or proportion of the workers in such workers' firm, or an appropriate subdivision of the firm, have become totally or partially separated, or are threatened to become totally or partially separated; and

B. There has been a shift in production by such workers' firm or subdivision to a foreign country of articles like or directly competitive with articles which are produced by such firm or subdivision; and

C. One of the following must be satisfied:

1. The country to which the workers' firm has shifted production of the articles is a party to a free trade agreement with the United States; or

2. The country to which the workers' firm has shifted production of the articles is a beneficiary country under the Andean Trade Preference Act, African Growth and Opportunity Act, or the Caribbean Basin Economic Recovery Act; or

3. There has been or is likely to be an increase in imports of articles that are like or directly competitive with articles which are or were produced by such firm or subdivision.

Because semiconductor wafer production shifted from the subject facility to China, a country that does not fall within subparagraphs C.1. or C.2. above, the only issue at hand is whether, following the shift of production abroad, there has been or is likely to be an increase of imports of articles like or directly competitive with the semiconductor wafers produced by the subject firm or subject facility.

During the second remand investigation, the Department obtained new information which revealed that, after the subject firm shifted semiconductor wafer production from the subject facility to China, the subject firm is likely to import semiconductor wafers that are like those produced at the subject facility. This fact was revealed during the investigation of petition TA-W-63,121 (Fairchild Semiconductor Corporation, Wafer Sort Department, Including On-Site Leased Workers from Manpower, South Portland, Maine; issued May 20, 2008; published in the Federal Register on June 3, 2008 at 73 FR 31716). As such, the Department determines that following the shift of production to China, the subject firm is likely to import semiconductor wafers that are like those produced by the subject workers during the relevant period.

Based on the aforementioned information, the Department has determined that there was a shift in production by the subject firm of articles like or directly competitive with the semiconductor wafers produced by the subject facility to a foreign country, and that, following the shift of production, there was a likely increase in imports by the subject firm of articles that are like or directly competitive with the semiconductor wafers produced at the subject facility.

In accordance with Section 246 the Trade Act of 1974 (26 U.S.C. 2813), as amended, the Department herein presents the results of its investigation regarding certification of eligibility to apply for ATAA. The Department has determined in this case that the group eligibility requirements of Section 246 have been met.

A significant number of workers at the firm are age 50 or over and possess skills that are not easily transferable. Competitive conditions within the industry are adverse.

Conclusion

After careful review of the facts generated through the second remand investigation, I determine that there was a total or partial separation of a significant number or proportion of workers at the subject facility, and that there was a shift in production to a foreign country followed by likely increased imports by the subject firm of articles like or directly competitive with semiconductor wafers produced at the subject facility.

In accordance with the provisions of the Act, I make the following certification:

All workers of Fairchild Semiconductor International, Mountain Top, Pennsylvania, who became totally or partially separated from employment on or after January 11, 2005, through two years from the issuance of this revised determination, are eligible to apply for Trade Adjustment Assistance under Section 223 of the Trade Act of 1974, and are eligible to apply for alternative trade adjustment assistance under Section 246 of the Trade Act of 1974.

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Signed at Washington, DC, this 22nd day of July 2008.

Elliott S. Kushner,

Certifying Officer, Division of Trade Adjustment Assistance.

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[FR Doc. E8-17379 Filed 7-29-08; 8:45 am]

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