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Samsung and Hynix Meet Judge Dread Anti-Trust Investigation	By Alexandru Sima, Hardware Editor 20th of October 2006, 07:23 GMT Adjust text size:


Executives of Samsung Electronics and Hynix Semiconductor were indicted by the US on Wednesday on charges of price-fixing in the memory chip business, as part of the long-running anti-trust investigation by the US justice department, according to the Financial Times (FT). It seems Kim Il-ung and Rha Young-bae at Samsung and Gary Swanson at Hynix participated in a global conspiracy between April 2001 and June 2002 to fix prices of D-ram chips. This came right after reports from the chip makers showed strong earnings from higher prices of D-rams, with demand for higher-density memory chips rising substantially. Samsung, the world's biggest memory-chip maker, predicted Thursday that its 2006 sales of D-ram chips would rise by 25% to $10 billion. The goal is to increase its share of the global D-ram market from 32% this year to 36-40% next year as the market is expected to grow about 17% to $35 billion in 2007. The Department of Justice uncovered a massive international conspiracy to fix D-ram prices. The scandal has ensnared four companies and 13 individuals and resulted in $731 million in fines, the second-largest criminal antitrust fine in history. Samsung pleaded guilty last year and paid a $300 million fine for its role in the conspiracy and Hynix paid $185 million in 2004 while Germany's Infineon Technologies paid $160 million in fines in 2003. The international conspiracy was hatched during conversations and electronics correspondence among individuals who discussed charging certain prices for D-rams for specific customers, and exchanging information on D-ram sales to customers. In some cases, they conspired to rig an online auction, said the Department of Justice quoted by the same publication. At the time of the conspiracy, Mr Kim and Mr Rha were vice presidents of sales and marketing for Samsung's memory division, while Mr Swanson was senior vice president of memory sales and marketing for Hynix's US subsidiary. If convicted, the three men could face up to three years in prison and a $350000 fine. The fines may be increased to double the amount of money gained from the conspiracy or double the loss suffered by the victims, if either of those amounts is bigger than the maximum fine of $350000. Earlier this year, four other executives at both Samsung and Hynix pleaded guilty to the price-fixing charges and agreed to serve prison terms ranging from five to eight months and to each pay a $250000 fine. In 2004, four executives of Infineon pleaded guilty to the conspiracy and got similar sentences and another executive from Micron Technology was sentenced to six months of home detention for obstruction of justice in connection with the matter showed FT. With the big players at the pit-stop, other companies could seize the moment and increase their sales. Also, shares of other manufacturers are already going up while those of the guilty are falling quick. In the meantime, the prices are still higher than they should be.

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