Samsung Exec’s DRAM Guilt Leads to Jail

Another domino has tumbled in the dynamic random access memory (DRAM)
price-fixing scheme.

The Department of Justice (DoJ) this week said an executive from Samsung
Semiconductor pled guilty and will go to jail for joining a global
conspiracy to fix DRAM prices.

Thomas Quinn of San Jose, Calif., agreed to serve eight months in prison
and pay a fine of $250,000. Quinn also agreed to help the DoJ in its ongoing

DRAM  is a ubiquitous semiconductor technology for
enabling high-speed storage and retrieval of information for PCs, laptops,
servers, printers and several other digital devices.

In the scheme, chipmakers Samsung, Hynix, Infineon and Elpida fixed prices,
affecting sales to computer makers Dell , HP , Compaq, IBM , Apple ,
Gateway and Sun.

The DoJ said in a statement that Quinn participated in the price-fixing
conspiracy as vice president of marketing for memory products at Samsung
Semiconductor, a U.S. subsidiary of Korean chipmaker Samsung Electronics
Company Ltd.

Quinn was charged with one count of violating the Sherman Act for
participating in meetings with competitors to fix DRAM prices and coordinate
bids in an auction held by DRAM buyer Sun Microsystems .

Quinn is the fourth Samsung executive to be charged in the scheme, following
Sun Woo Lee, Young Woo Lee, and Yeongho Kang, who pled guilty in March and agreed to serve prison terms ranging from seven to
eight months and to pay fines of $250,000 each.

“Prison time for price-fixers remains the most potent deterrent to illegal
cartel activity,” said Thomas O. Barnett, assistant attorney general in
charge of the department’s antitrust division.

“Today’s action sends a clear message — those who engage in price-fixing
schemes will be held accountable for their illegal conduct.”

The new charge raises the DoJ’s DRAM bust tally: Now four other companies and 13
individuals have been charged, with fines totaling more than $731 million.

The DoJ launched an investigation into price fixing by the world’s DRAM
makers in 2004.

German chipmaker Infineon was the first to settle with the DoJ, agreeing to
a guilty plea and a $160 million fine.

Hynix followed with its plea and
$185 million settlement, the third-largest criminal antitrust fine in U.S.

Months later, Samsung also pled guilty and agreed
to pay a $300 million fine for its role in the conspiracy.

Earlier this year, Japanese DRAM maker Elpida joined the parade, forking over an $84 million fine.

Earlier this month, Sun Microsystems and Unisys sued
Hynix for artificially inflating DRAM prices.

The DoJ said it is still “very actively investigating antitrust violations
in the DRAM industry.”

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