Intel wants three more Chandler sites inside its foreign trade zone, and a filing ten days earlier lists the 108 foreign materials it proposes to bring into that zone
A Commerce Department notice published on Monday morning consists of one paragraph and three street addresses.
The Foreign-Trade Zones Board has docketed an application from the City of Phoenix, which holds the grant for Foreign-Trade Zone 75, to expand Subzone 75C on behalf of Intel Corporation. The three sites are all in Chandler, Arizona: 3.1 acres on West Frye Road, 0.34 acres on West Chicago Street, and 4.5 acres on East Queen Creek Road. That is 7.94 acres in total. The application was formally docketed on 30 July, and comments run to 14 September, with rebuttals accepted through 28 September.
On its own, that is a land filing. Ten days earlier the same board published what Intel proposes to do inside the zone, and that document is the one worth reading.
The parts list
The production notification, received by the board on 16 July and published on 24 July, names four proposed finished products: high precision quartz photomasks, semiconductor transducers, printed circuits, and electronic integrated circuits. All four are listed as duty free.
Then it names the inputs. The list runs to 108 entries, one of which, nitrogen trifluoride, is printed twice.
It opens with corundum and works through most of the periodic table's usable gases, xenon and helium and deuterium among them, then the mineral acids, hydrofluoric and sulfuric and nitric and phosphoric. After those come the silanes that deposit and etch silicon, dichlorosilane and disilane and hexachlorodisilane. Further down sit cobalt and copper sputtering targets, polycrystalline silicon wafers, permanent metal magnets, and two entries that are finished goods in their own right: a central processing unit, and dynamic random access memory. The duty rate across the whole list runs from duty free to 6.5 percent.
A company does not usually publish its bill of materials. To use the zone, this one had to.
The clause that decides the money
The notice states that certain of those materials carry duties under section 122 of the Trade Act of 1974, section 232 of the Trade Expansion Act of 1962, or section 301 of the Trade Act of 1974, depending on the country they came from. It then states that the applicable decisions under those sections require the merchandise to be admitted to a foreign trade zone in privileged foreign status.
That status is defined at 19 CFR 146.41, which provides that foreign merchandise not manipulated or manufactured so as to change its tariff classification will be given privileged foreign status, and that the status cannot be abandoned and survives any later change in form by manufacture. The practical effect is that the tariff treatment is fixed at the door. A gas or a target that arrives carrying a section 301 duty still carries it after it has been turned into a chip that the same notice lists as duty free.
Why this is running now
The July notification is ten days old and has not appeared on this site before. It runs today because Monday's application is the next step on the same docket, because the two documents only make sense read together, and because the comment period on the production activity is still open. It closes on 2 September.
Neither notice gives a dollar value, a volume, a headcount, or a stated reason for any of it. The board has designated a staff examiner, Qahira El-Amin, to review the site application and make recommendations. No decision has been issued on either filing.
