H338127

 HQ H338127 September 17, 2024 OT:RR:CTF:VS H338127 RRB CATEGORY: Origin George R. Tuttle, III 3950 Civic Center Drive Suite 310 San Rafael, CA 94903 RE: Country of Origin of a Silicon Carbide Schottky Diode Dear Mr. Tuttle: This is in response to your correspondence, dated February 22, 2024, on behalf of your client, Navitas Semiconductor Corporation (“Navitas”), requesting a ruling concerning the country of origin of a silicon carbide Schottky diode. FACTS: The merchandise at issue is a silicon carbide Schottky diode. Silicon carbide diodes are used in various applications, including solar panels, motor drives, uninterruptible power supplies, and electric vehicles. Navitas explains that third party vendors will produce the bulk silicon carbide wafer material in the United States by growing the silicon carbide crystal substrate (in the form of ingots or boules) in a high-temperature and high-pressure growth environment. After procuring these raw silicon carbide wafers from U.S. vendors, they will be used in the front-end manufacturing of the subject merchandise. Front-End Processing All of the front-end processing of the silicon carbide Schottky diode will take place in the United States and will include the following steps: Single Crystal Growth: This step begins with the placement of a seed crystal of high-quality silicon carbide into a graphite crucible, along with a source material of high purity silicon carbide powder at the required temperature and pressure. The end result is the growth of a highly purified silicon carbide ingot or boule. Slicing the Silicon Carbide Ingot: The silicon carbide ingot or boule is sliced using a diamond multi-wire cutting saw, which controls warp, bow and total thickness variation. Double-Sided Grinding: The wafer substrates will undergo double-sided grinding to remove the irregularities of total thickness variation, bow measurement (the deviation of the center point of the wafer surface to the reference surface), and warp (the difference between the maximum and minimum distance between the wafer surface and the reference surface). Double-Sided Polishing: The wafer substrates will undergo double-sided polishing to reduce the roughness of the substrate to less than 2 nanometers. Chemical-Mechanical Polishing (CMP): This step further improves the surface quality by reducing the roughness to less than 0.2 nanometers and by eliminating scratches. Epitaxial Deposition or “Epi-Growth”: Epitaxy is a type of crystal growth or material deposition in which new crystalline layers are formed with one or more well-defined orientations with respect to the crystalline seed layer. The deposited crystalline film is called an epitaxial film or epitaxial layer. This process uses a high-temperature chemical vapor deposition (HT-CVD), exposing the wafer substrate to one or more volatile precursors, which react and/or decompose on the substrate surface to produce the desired deposit. Photolithography: Photolithography consists of techniques that use light to produce minutely patterned thin films of suitable materials over a wafer substrate to protect selected areas during subsequent etching, deposition, or implantation operations. Photoresist, Exposure, Developing: After the wafers are cleaned and prepared, ultraviolet light is used to transfer a geometric design from an optical mask to a light-sensitive chemical (photoresist) coated on the substrate. The photoresist will either break down or harden where it is exposed to light. The patterned film is then created by removing the softer parts of the coating with solvents known as developers. Etching and Ion Implantation: When etching is performed, a dry chemical agent removes the uppermost layer of the substrate in the areas that are not protected by photoresist. At this stage, the wafer will undergo etching steps many times before it is complete. Chip Probing: During chip probing, each die on a wafer is electrically tested to ensure the quality of the dies. Back-End Processing In contrast to the front-end operations, all of the back-end processing of the silicon carbide Schottky diode will take place in China and will include the following steps: Wafer Mount and Sawing: This step involves mounting the wafer backside onto a sticky tape, which is stretched on a wafer frame for easy handling, and then separating the individual silicon chips (die) from each other on the wafer. Lines are sawed into the wafer for each die to prevent any electrostatic issue or contamination. Plasma Cleaning: This step involves plasma polishing the silicon carbide die as an alternative or complementary process to traditional chemical-mechanical polishing. It removes sub-surface defects, which can improve yield and reduce the die cost. Die Attach (or Die Bonding): Die attach or die bonding involves attaching the die to a substrate. Wire Bonding: This is the electrical connection between die and lead frame with the use of gold, copper, or aluminum wires. Molding: Molding encapsulates the semiconductor die with molding compounds (e.g., black plastic materials) in order to protect the device from the outside environment, such as light, heat, humidity, and dust. Plating: Plating is the application of a coat of metal over the leads that connect the device mechanically and electrically to the printed circuit board and prevents corrosion and improves solderability. Trim and Form: This step involves trimming or cutting features of the frame strip that involves shorting the leads together, and then forming the leads into the correct shape and position. Testing/Laser Marking/Final Visual Inspection: Electrical testing is performed to verify the reliability of the semiconductor. Subsequently, laser marking and final visual inspection are performed to detect any defects. The final step in the back-end processing is the packing and shipping of the finished semiconductor products for delivery to the customer. ISSUE: What is the country of origin of the Schottky diode? LAW AND ANALYSIS: The United States Trade Representative (“USTR”) has determined that an additional ad valorem duty of 25 percent will be imposed on certain Chinese imports pursuant to its authority under Section 301(b) of the Trade Act of 1974 (“Section 301 measures”). The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(f), HTSUS. When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. 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). The substantial transformation determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). Navitas posits that the wafer fabrication and other front-end processing steps in the United States establish the character and use of the silicon carbide Schottky diode, and that none of the back-end processing steps occurring in China will change such character and use. Thus, Navitas asserts that the silicon carbide die in wafer form will not undergo a substantial transformation as a result of back-end processing in China, which merely thins the material and separates the die from the wafer. Accordingly, Navitas seeks confirmation that the country of origin of the silicon carbide Schottky diode will be the United States since a substantial transformation will not occur as a result of back-end processing in China. In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the totality of the circumstances and makes such determinations on 

The United States Trade Representative (“USTR”) has determined that an additional ad valorem duty of 25 percent will be imposed on certain Chinese imports pursuant to its authority under Section 301(b) of the Trade Act of 1974 (“Section 301 measures”). The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(f), HTSUS. When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. 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). The substantial transformation determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). Navitas posits that the wafer fabrication and other front-end processing steps in the United States establish the character and use of the silicon carbide Schottky diode, and that none of the back-end processing steps occurring in China will change such character and use. Thus, Navitas asserts that the silicon carbide die in wafer form will not undergo a substantial transformation as a result of back-end processing in China, which merely thins the material and separates the die from the wafer. Accordingly, Navitas seeks confirmation that the country of origin of the silicon carbide Schottky diode will be the United States since a substantial transformation will not occur as a result of back-end processing in China. In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. The