HQ 555638: Applicability of subheading 9802.00.80, HTSUS, to thyristor chips sawed from silicon slices.Incident- al operations;U.S. v. Texas Instruments.

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                                       HQ 555638

                                     June 11, 1990

            CLA-2 CO:R:C  555638 RA

            CATEGORY:  Classification

            TARIFF NO.:  9802.00.80

            Mr. Luis Chavez
            Kemp, Smith, Duncan & Hammond
            P.O. Drawer 2800
            El Paso, Texas 79999-2800

            RE:  Applicability of subheading 9802.00.80, HTSUS, to
                 thyristor chips sawed from silicon slices.Incident-
                 al operations;U.S. v. Texas Instruments.

            Dear Mr. Chavez:

                 This is in response to your letter of April 11, 1990,
            regarding the tariff treatment of thyristor chips separated
            from silicon slices in Mexico before being assembled into
            operative thyristors.  You inquire as to the applicability of
            subheading 9802.00.80, Harmonized Tariff Schedule of the
            United States (HTSUS).

            FACTS:

                 You state that TECCOR Electronics Inc. of Irving, Texas,
            is assembling thyristors in Mexico and plans to utilize chips
            arranged in rows and columns on silicon slices with so-called
            "streets" separating them from one another.  The silicon
            slices containing hundreds of chips delineated by streets will
            be sawed along the streets.  When the individual chips are
            separated, they are ready for assembly into operative
            thyristors without any further fabrication.

            ISSUE:

                 Whether the separation of the individual chips by sawing
            them apart along the streets indicated on the silicon slices
            is considered an operation incidental to their assembly into
            thyristors, thereby rendering them eligible for an allowance
            in duty under subheading 9802.00.80, HTSUS.

















                                      - 2 -


            LAW AND ANALYSIS:

                 Subheading 9802.00.80, HTSUS, provides a partial duty
            exemption for:

                 [a]rticles assembled abroad in whole or in part of
                 fabricated components, the product of the United
                 States, which (a) were exported in condition ready
                 for assembly without further fabrication, (b) have
                 not lost their physical identity in such articles
                 by change in form, shape, or otherwise, and (c)
                 have not been advanced in value or improved in
                 condition abroad except by being assembled and
                 except by operations incidental to the assembly
                 process such as cleaning, lubricating, and painting.

            All three requirements of subheading 9802.00.80, HTSUS, must
            be satisfied before a component may receive a duty allowance.
            An article classified under this tariff provision is subject
            to duty upon the full value of the imported assembled article
            less the cost or value of the U.S. components, provided the
            documentation requirements of section 10.24, Customs
            Regulations (19 CFR 10.24), are met.

                 You contend that the value of the chips used in
            assembling the imported thyristors should be deducted when
            computing the duty to be assessed as the chips are complete
            when they are exported from U.S. and need only be separated
            before assembly into the imported product.  You stated that
            the chips are specifically arranged on the silicon slice to
            produce "streets" along which the sawing will be done to
            separate the individual areas.

                 In The U.S. v. Texas Instruments Inc., C.A.D. 1178, 545
            F. 2d 739 (1976), the appellate court held that scoring and
            breaking a silicon slice along provided so-called "streets" to
            separate individual transistor areas did not amount to further
            fabrication of the areas and, therefore, could be considered
            incidental to the assembly process.

                 In your case, the individual areas are separated by
            sawing instead of scoring and breaking which were utilized in
            the court case.  However, the result achieved is similar and
            the desired chips are merely separated from each other without
            any change in their characteristics.  Accordingly, the
            separation process is not considered to be a further
            fabrication or advancement in value of the chips which are
            subsequently assembled into the imported thyristors.  Thus,













                                      - 3 -


            the separation process may be treated as an operation
            incidental to assembly within the scope of the provision in
            subheading 9802.00.80, HTSUS.

            HOLDING:

                 The separation of individual thyristor chips by sawing a
            silicon slice is not considered to be a further fabrication
            and is incidental to the assembly of the imported thyristors.
            The U.S.-made chips are eligible for the allowance in duty
            provided for in subheading 9802.00.80, HTSUS, provided the
            documentary requirements of 19 CFR 10.24 are satisfied.

                                        Sincerely,




                                        John Durant, Director
                                        Commercial Rulings Division









































            RARNOLD:lw 5/24/90