US, EU, Asia officials squash MCP tariffs

November 4, 2005 – Officials from the US, Europe, Japan, South Korea, and Taiwan have agreed to eliminate duties on multichip packages (MCP) beginning in January 2006, praised by industry associations as a gesture of support for fast-growing technology areas.

Semiconductors have been duty-free through much of the world for many years under the Information Technology Agreement (ITA), but the technological advance of incorporating more than one chip inside a package led US, Korean, and European Union customs authorities to reclassify MCPs into a new category that was no longer duty-free. Tariffs on MCPs were levied by the US (2.6%), Korea (2.6%), and the EU (nearly 4%).

“This is a major step forward in our effort to eliminate tariffs on multichip packages and lower costs of semiconductor technology for consumers around the world,” stated SIA president George Scalise.

SEMI pegs MCP revenues at $4.2 billion in 2004 (from zero at the beginning of the decade), and growing at a compound annual growth rate (CAGR) of 25% to $7.9 billion by 2008, well ahead of the 10% CAGR projected for the overall semiconductor industry.


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