RealTime IT News

Elpida to Plead Guilty to Price Fixing

The latest chapter of an ongoing Department of Justice (DoJ) investigation into price fixing in the dynamic random access memory market (DRAM) has resulted in Japanese manufacturer Elipida forking over an $84 million fine.

All told, the DoJ said it has issued some $730 million in fines to other companies and individuals involved in similar price-fixing schemes.

"Today's charge demonstrates our continuing commitment to prosecute and deter cartels that harm American consumers," said Thomas O. Barnett, acting assistant attorney general in charge of the department's Antitrust Division, in a statement. "We are gratified to bring to justice another member of the DRAM cartel, which is one of the largest cartels ever discovered."

According to the two-count felony charge filed today in the U.S. District Court in San Francisco, from April 1, 1999 to June 15, 2002, Elpida conspired with unnamed DRAM manufacturers to fix the prices of DRAM sold to certain computer and server manufacturers.

The customers directly affected by the price-fixing conspiracy were Dell, Compaq, HP, Apple Computer, IBM, and Gateway. In addition, Elpida conspired with an unnamed DRAM manufacturer to rig a bid for a lot sold to Sun Microsystems in March 2002.

Under the plea agreement, which must be approved by the court, Elpida has agreed to cooperate with the government in its ongoing investigation of other DRAM producers.

"Elpida is the fourth company to agree to plead guilty to price-fixing charges in our investigation of antitrust violations in the DRAM industry," said Scott D. Hammond, the Antitrust Division's deputy assistant attorney general for Criminal Enforcement. "Elpida will provide valuable assistance in our continuing investigation of the DRAM industry."

In October 2004, German manufacturer Infineon Technologies AG pleaded guilty and was sentenced to pay a $160 million criminal fine for its role in the DRAM conspiracy.

In May, Korean manufacturer Hynix Semiconductor pleaded guilty and was sentenced to pay a $185 million criminal fine.

And in November, Korean manufacturer Samsung Semiconductor and its parent company Samsung Electronics Company Ltd. pleaded guilty and were sentenced to pay a $300 million criminal fine.

DRAM is the most commonly used semiconductor memory product. It's used such items as PCs, laptops, workstations, servers, printers, PDAs, mobile phones, digital cameras, TVs, digital set top boxes and digital music players.

There were approximately $7.7 billion in DRAM sales in the United States in 2004, according to a DOJ statement, which pegged Elpida as the world's fifth-largest DRAM manufacturer.