DOJ Investigating Flash Disk Vendors

SanDisk has confirmed that it is one of 24 companies under investigation by the Department of Justice for antitrust violations in the flash memory market, although the company has no idea why.

Samsung Electronics, Toshiba, and SanDisk have all received subpoenas along with Hynix, a major memory vendor in Korea. SanDisk makes flash drives and has a joint venture with Toshiba to manufacture them.

Intel  has not been subpoenaed, according to a spokesman, but has its own headaches with the federal government. The Federal Trade Commission (FTC) is asking for more information on Intel’s proposed spin-off of its flash business with STMicroelectronics.

Market researcher iSuppli projects the flash market will level off in pricing this year after more than a year of plunging prices. The firm expects sales to be up this year, due to decreased output and a brief interruption at a Samsung plant due to a power outage.

SanDisk , based in Milpitas, Calif., said it has received subpoenas aimed at both the company and its Chief Executive Officer, Eli Harari, as well as a notice from the Canadian Competition Bureau, Canada’s antitrust agency, which is also investigating anti-competitive allegations.

Spokesman Mike Wong admits he’s not sure why they are being investigated, especially in light of the precipitous drop in flash memory prices last year. “It seems odd to me if you are one of 24 companies. It’s kind of hard to have collusion between 24 companies. We’re a little perplexed about the whole thing,” he told

“With regards to the DOJ, we intend to fully cooperate with the investigation but we can’t speculate on what steps they’ve taken and why,” he added.

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