RealTime IT News

DRAM Slam: Prison Time For Samsung Execs

Three more executives in the dynamic random access memory (DRAM) chip industry are heading to prison for their roles in a global price-fixing conspiracy.

The ongoing Department of Justice (DoJ) investigation has already netted $731 million in fines and resulted in jail time for nine other executives.

The latest to enter guilty pleas and take prison time are Samsung executives Sun Woo Lee, senior manager of DRAM Sales (8 months); Yeongho Kang, associate director of DRAM marketing for Samsung's subsidiary in the United States (7 months); and Young Woo Lee, sales director for Samsung's German subsidiary (7 months).

The three were also fined $250,000 each.

In October, Samsung, the world's largest manufacturer of DRAM chips, paid $300 million, the second largest criminal antitrust fine in U.S. history, for its role in the price-fixing scheme.

"These are the first executives from Samsung to plead guilty to fixing prices in what is still an active investigation into antitrust violations in the DRAM industry," Thomas O. Barnett, assistant attorney general in charge of the DoJ's Antitrust Division, said in a statement.

"We will continue our efforts to bring to justice other domestic and foreign-based executives who were involved with fixing DRAM prices."

Other DRAM makers convicted in the probe include Korea's Hynix ($185 million), Japanese manufacturer Elpida Memory ($84 million) and Germany's Infineon ($160 million).

The one-count felony indictment filed Wednesday in a San Francisco federal court charged the three Samsung executives with conspiring with other memory chip makers to fix the prices of DRAM sold to targeted computer and server manufacturers in the United States from 1999 to 2002.

According to the DoJ, the conspiracy directly affected sales to U.S. computer makers Dell, HP, Compaq, IBM, Apple and Gateway.

"True deterrence occurs when guilty individuals serve jail terms, and not just when corporations pay criminal fines," U.S. Attorney General Alberto R. Gonzales said in a statement.

"These pleas should send a clear message that we will hold accountable all conspirators, whether domestic or foreign, that harm American consumers through their illegal conduct."

DRAM is the most commonly used semiconductor memory product, providing high-speed storage and data retrieval for a wide variety of computer, telecommunications and consumer electronic products.

DRAM is used in personal computers, laptops, workstations, servers, printers, hard disk drives, personal digital assistants, modems, mobile phones, telecommunications hubs and routers, digital cameras, video recorders and TVs, digital set-top boxes, game consoles and digital music players.

There were approximately $7.7 billion in DRAM sales in the United States in 2004.