More Indictments in DRAM Price-Fixing

Former Samsung and Hynix officials are the latest to be charged with rigging prices for chips.


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Posted October 19, 2006

Roy Mark

Two former Samsung officials and a former Hynix executive are the latest to be charged in the Department of Justice's (DoJ) ongoing investigation into a DRAM chip price-fixing conspiracy.

The probe has already resulted in Korean-based Samsung and Hynix, Japan's Elpida and Infineon of Germany pleading guilty and paying $729 million in criminal fines.

In addition, 13 former executives from the four companies and a former executive from U.S.-based Micron have pleaded guilty to conspiracy charges. All have been fined and sentenced to prison terms.

DRAM (dynamic random access memory) is a common semiconductor technology for high-speed storage and information retrieval for PCs, laptops, servers, printers and several other digital devices.

Monday, a San Francisco grand jury charged Il Ung Kim and Young Bae Rha of Samsung and Hynix's Gary Swanson were charged with participating in the conspiracy to suppress competition.

If convicted, all three face maximum jail terms of three years and fines of $350,000 each.

"The Antitrust Division will vigorously pursue individuals who engage in criminal cartel conspiracies," Assistant Attorney General Thomas O. Barnett said in a statement.

"Criminal cartel enforcement is the Division's top priority and both companies and individuals must comply with the antitrust laws."

The DoJ originally launched its investigation into price fixing by the world's DRAM makers in 2004.

In the scheme, according to the DoJ, Samsung, Hynix, Infineon and Elpida all conspired to fix DRAM chip prices to computer makers Dell (Quote), HP (Quote), Compaq, IBM (Quote), Apple (Quote), Gateway (Quote) and Sun.

At the time of the 2001-2002 conspiracy, Kim was vice president of marketing for the memory division at Samsung while Rha served as vice president of sales and marketing for the memory division.

Swanson was senior vice president of memory sales and marketing for Hynix America, the U.S.-based subsidiary of Hynix Semiconductor.

The DoJ claims the three participated in the conspiracy through a series of telephone calls and meetings.

As a result of the telephone calls and meetings, all three agreed to help rig an online auction of DRAM chips by either not submitting a bid or submitting intentionally high bids.

This article was first published on InternetNews.com. To read the full article, click here.

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