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NEC, Fujitsu face trade charges

Commerce Department officials issue preliminary findings that the Japanese firms are guilty of "dumping" vector supercomputers in the U.S. market.

The Commerce Department officials have issued preliminary findings that NEC and Fujitsu were guilty of "dumping" vector supercomputers in the U.S. market at less than fair value.

The agency's findings, made yesterday, will be taken up by the International Trade Commission, which is expected to determine the degree of injury to the industry by July.

That could lead to substantial penalties on future sales in the United States by NEC and Fujitsu.

The case centers on the sale of supercomputers to the National Center for Atmospheric Research last year. NEC, Fujitsu, and Cray Research, a subsidiary of Silicon Graphics, issued competing bids, with the weather laboratory selecting a $35 million NEC bid for four vector supercomputers in May.

The Commerce Department issued a "predecisional" dumping analysis, charging NEC with dumping at a level of 163 to 280 percent, effectively taking the company out of the running for the bid. Cray later filed a complaint of antidumping with the department and ITC in July.

"As the supercomputing division of a global corporation, we fully support free trade based on open and fair competition," said Robert Ewald, Cray Research president, in a statement. "As a result, the role of petitioner in this antidumping dispute has never been comfortable for us. However, we believe that the long-term interests of the users of high-performance computers worldwide would have been severely compromised had we not protested the unfair practices of our competitors."

But executives from NEC contend the government never had an intention of conducting a fair evaluation.

"Months before this investigation was even initiated, Commerce, with the approval of then-Secretary Kantor, released an analysis finding our company guilty of dumping in order to keep NEC supercomputers out of the U.S. market," said Samuel Adams, sales and marketing vice president for NEC subsidiary HNSX Supercomputers, in a statement.

He added that the preliminary findings were "totally unfounded." NEC filed a suit in the Court of International Trade in October, seeking the appointment of an independent official to conduct an investigation into the Commerce Department's actions. The CIT is a federal court that reviews U.S. trade laws.

Although the CIT did not enjoin the Commerce's preliminary findings as NEC requested, the company remains optimistic about its upcoming case, set to begin Monday.